I own BHP and think they will take over RIO. Can anyone give me a reason why I shouldn't sell my BHP shares then use the money to buy RIO ? At the moment the Ratio is about 2.6 but if BHP take over I'll get 3.4. That being the case I'll have more BHP shares than I do now.
Garpal Gumnut
Ross Island Hotel
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Re: BHP / RIO
A good strategy if the t/o goes ahead.
If it doesn't RIO share may tank and your dough with it.
London tonight is betting your way, as RIO price is going gangbusters more than BHP atm.
gg
A good strategy if the t/o goes ahead.
If it doesn't RIO share may tank and your dough with it.
London tonight is betting your way, as RIO price is going gangbusters more than BHP atm.
gg
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Re: BHP / RIO
As gg suggests, your strategy is sound ONLY if the takeover proceeds. If it doesn't, you would expect BHP to rise, and RIO to fall.
The takeover is going to be a long winded one if it makes it (I'm betting it will), so I think you'd only want to do it if you were in for the long haul.
Having said all of that, the closer we get to the takeover going through, you would also have to expect that RIO will close the gap from around 2.6 and move closer to the bid ratio of 3.4
The combined company is going to be one hell of a management challenge....
As gg suggests, your strategy is sound ONLY if the takeover proceeds. If it doesn't, you would expect BHP to rise, and RIO to fall.
The takeover is going to be a long winded one if it makes it (I'm betting it will), so I think you'd only want to do it if you were in for the long haul.
Having said all of that, the closer we get to the takeover going through, you would also have to expect that RIO will close the gap from around 2.6 and move closer to the bid ratio of 3.4
The combined company is going to be one hell of a management challenge....
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I heard someone on tv saying that BHP could possibly takeover Rio if this merger gets rejected. Does anyone think this is possible?
And if so who would gain from it BHP or RIO?
The reason is I just bought some BHP and am wondering if I should of bought RIO?
And if so who would gain from it BHP or RIO?
The reason is I just bought some BHP and am wondering if I should of bought RIO?
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why do you say that a friend of mine said Rio and BHP were good investments and he has years of trading experience.
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I have always been one to short the acquiring company upon announcement. A good example of a recent opportunity is the NCM and LGL takeover where NCM dropped and LGL essentially moved to the buy out price.
This is in line with Buffetts way of investing. I will admit the scenario is completely different when a merger is announced a great example of this was the Oxiana and Zinifex deal. How do 2 companies who merge end up below 50c some 18 months ago?
Anyway I am keeping an eye on this as this deal has been rumoured for a while now between BHP and RIO
thanks
This is in line with Buffetts way of investing. I will admit the scenario is completely different when a merger is announced a great example of this was the Oxiana and Zinifex deal. How do 2 companies who merge end up below 50c some 18 months ago?
Anyway I am keeping an eye on this as this deal has been rumoured for a while now between BHP and RIO
thanks
Garpal Gumnut
Ross Island Hotel
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BHP may go for RIO
I'm going out on a limb here.
ASF members may remember some years ago that RIO was a target for BHP.
RIO have made some very, very, bad decisions recently and are on the nose with analysts and the market.
BHP ain't doing much better by the way.
If I were CEO of BHP I'd be running the ruler over RIO.
Just my opinion.
gg
I'm going out on a limb here.
ASF members may remember some years ago that RIO was a target for BHP.
RIO have made some very, very, bad decisions recently and are on the nose with analysts and the market.
BHP ain't doing much better by the way.
If I were CEO of BHP I'd be running the ruler over RIO.
Just my opinion.
gg
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Re: BHP may go for RIO
Like your call GG... would put some energy into the market - does it attract the interest of the Foreign investment board or what ever they are called? - can't recall if this was an issue last time. Chinese would certainly be nervous about this
Like your call GG... would put some energy into the market - does it attract the interest of the Foreign investment board or what ever they are called? - can't recall if this was an issue last time. Chinese would certainly be nervous about this
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Re: BHP may go for RIO
HUGE exposure to iron ore, if the price tanks, would cause a massive share price drop.IMO
The thing with BHP they are somewhat diversified, this would cause a massive link to iron ore prices.
HUGE exposure to iron ore, if the price tanks, would cause a massive share price drop.IMO
The thing with BHP they are somewhat diversified, this would cause a massive link to iron ore prices.
Garpal Gumnut
Ross Island Hotel
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Re: BHP may go for RIO
From memory, last time, it was not an issue for the FIRB.
The Chinese would have to wear it, or more likely stock up on shares in one or t'other.
I'm a bull on RIO atm.
Just my opinion though. Nothing in the AFR etc to back it up, then they may not exist when the BHP/RIO deal is completed.
gg
From memory, last time, it was not an issue for the FIRB.
The Chinese would have to wear it, or more likely stock up on shares in one or t'other.
I'm a bull on RIO atm.
Just my opinion though. Nothing in the AFR etc to back it up, then they may not exist when the BHP/RIO deal is completed.
gg
Re: BHP may go for RIO
No way BHP will till for RIO, it will face the wrap of its investors...in the last 5 years there is nothing but disaster for BHP when they make takeover and waste Billion of shareholder money...
that is why Marius get kicked out as the CEO ...The new boss is more about cost control and yield extra on their existing asset and their shareholder put him in that position to do just that not waste more cash on acquisition.
No way BHP will till for RIO, it will face the wrap of its investors...in the last 5 years there is nothing but disaster for BHP when they make takeover and waste Billion of shareholder money...
that is why Marius get kicked out as the CEO ...The new boss is more about cost control and yield extra on their existing asset and their shareholder put him in that position to do just that not waste more cash on acquisition.
