News: Rio fails to score majority Riversdale stak, page-7

re: News: Rio fails to score majority Riversd... I'm out now...as at yesterday.

I believe there may be trades above the offer price in the short term for the reasons mentioned in my last post.

Beyond April 6 is interesting still because my expectation is that RIV will remain controlled by the existing 3 majors with some small holders remaining in longer term. After 6th April I expect the price to fall, but not much. The price may then rise after 6 months or so as the majors can again use creep provisions to increase. I am not keen on staying in for two reasons:

1. RIV may be delisted sooner or later because it has fewer than the required shareholder numbers to remain listed...then a holder has the problem of no market for the shares. Long term RIO may have another crack to take out the others (including CSN and Tata), but don't hold your breath.

2. Even if it remains listed I expect the majors to fund the future activities using new equity issues in the RIV vehicle to keep the price under pressure (inefficient capital structure for RIV). They ought to be able to debt fund further up their corporate structure, so it may be no impediment to them. There won't be any dividends!

Just my opinion.

regards
DF