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The era of big acquisitions in mining caused a lot of indigestion if I recall. Rio/ Alcan one prime example of the larger co grossly overpaying.
BHP should just concentrate on its own knitting, they do not need Anglo, they already overpaid for Oz.
I should have said, sage words, not advice by the way.
Thank you Londoner7, sage advice and appreciated. I have a small pot of cash, burning a hole, earning zero interest in my brokerage account. I think BHP will be its home, I already have some RIO and like yourself, have traded back and forth at various price points.
I shall take your advice on the suggested reading which sounds useful in terms of understanding the longer term.
Best regards
Reader61, if you're looking for advice on trading BHP today, I can't offer any.
But if you are looking for an entry point to a long-term holding in BHP then these bid situation opportunities don't come up very often. I like to invest in companies that offer me an interest in their activities. BHP is the largest miner in the world and at the forefront of the application of technology as the world transitions towards clean energy. This stuff fascinates me and BHP covers it well in their 'insights' publications. Want to know about the practicalities of the transition, then read what BHP has to say. These are the guys at the coal face, not the idealists sitting at a keyboard.
I've held a stake in BHP for decades and I trade - both sides - as the opportunity arises. If you wish to build a holding then take a small stake today - large enough to minimise trading costs - and pound average over time. In 10 years time, whether you average in at £21 or £23 will be an irrelevance.
Incidentally, you could make a similar case for RIO or other large miners. Take a look at their portfolios and direction of travel, and pick one that appeals to your interests.
If they engage in bid warfare, the BHP price will drop from here to offer a more attractive entry point. However, without knowing the bigger strategy alluded to by other posters do I jump or stick?
Nobody has considered the combined value of the two companies
Solomonkane, in answer to d)
I've no doubt the M&A team at BHP will have run the rule over all possible candidates. They'll understand the regulatory and local risk involved in the assets and the likely price of a successful bid. AAL has well publicised problems outside of the core copper and iron assets of interest to BHP, and I'd guess BHP sees those issues around AAL as providing an opportunity. Once in play there are a number of possible outcomes. I doubt BHP ever expected their initial bid to be successful, but rather it is part of a larger strategy.
I'm a long term holder in BHP (decades), trading when the opportunity presents but always maintaining a stake. I don't like the short term impacts on the BHP SP of these bid approaches but it is part of the game.
The FT has an excellent article on the merits of buy or build - worth a look if you can get access (subscription)- titled, The ‘build or buy’ copper maths that could guide BHP’s bid for Anglo.
a few thoughts.
a) bhp has not won hearts and minds on this at all- most of its institutions cannot see the merits / logic of this pick and mix approach - bhp has not done its home work on the merits of this at all.
b) why on earth does bhp want debeers? diamonds have had it -they are now being manufactured cheaply- the whole industry is in a slow death
c) reputational risk - bhp has an outstanding track record of investment returns. anglo does not, is cash poor, has some major capex to do, will dilute bhp earnings. bhp is taking a significant risk with its reputation. this is not like bhp/ oz minerals.
d) bhp wants copper assets, we have been informed - ok so why not anto***asta, first quantum minerals etc
e) other than modest corporate hq overlap, where are the synergies with this deal?
f) anglo am board are not going to approve without getting an over the top offer, which bhp if it has any sense is not going to offer- so who is pulling whose plonker here?
message to bhp; its not too late, withdraw honourably, deal was never there anyway, and it will be forgotten about in a few months. bhp does not need anglo am myriad of problems
It’s dropping because people in the know BHP will be paying over the odds while stockmarket indices are trading at roppy levels.
In US, everyone was under impression interest rates coujd be cut by May, that isn’t happening, maybe not in 2024 at all. That is a red flag, there’s gossip that FEDS could be looking at raising rates to bring down inflation as it has started to rise this yr.
Factors for BHP sp direction is not all about BHP, it’s the wider picture out in this big nasty world we’re now living..
Gla
I’m getting lots of alerts of investment institutions disclosing their holdings in BHP. Are they loading up,on BHP? Or am I getting it the wrong way round.
The advisers won’t be paid in shares. I don’t know what BHP are doing. They’ve already racked up tens of millions in advisory fees, payable in cash, on a bid that has zero chance of succeeding and a high risk of failure even if they bid 40% more. Did they not buy a small stake in AAL prior to their bid to mitigate part of the cost ?
If this firm is serious in its offer for AAL then bite the bullet and pay £45 per share and be done with it before the Chinese snap it up. With a lot of mouths to feed, it would be a rare opportunity to make a killing for a very large population.
Why is this share falling? They have made a paper offer .Paper is cheap. NO MONEY HAS BEEN LOST OR ASSETS.
quite an illogical reaction made by fools!
I think I’ll be buying more RIO this yr than BHP, i meant
The copper talk could be a red herring. The disguised target is POLY 4..Read between the lines.
No doubt BHP has examined the various outcomes from their opening bid. The structure of the offer makes it clear that there are many elements of the AAL business of no interest to BHP.
AAL management were already examining a restructure, this bid accelerates the process and may fracture the business into more bitesize pieces, allowing BHP to make a more targeted bid for the pieces it wants - it will not want diamonds, platinum or a piece of Yorkshire.
This BHP management team is a very different group to those who originated the bid for RIO. They claim to be more disciplined than the old firm - the last 6 years has shown they are, I hope it continues.
What about FIRST QUANTUM LTD in Canada?
They have great Copper assets too, and coujd get them on cheap due to debt they carry.
An extra £10 on top of the share offer might be tempting.
Driftking27
I do hold AAL
ATB
Driftking27.
AAL deal may not happen!!
I'm more than happy to set BUY orders all the way down.
If you like BP gl ...fill ya boots
BHP COULD NOT PAY ENOUGH FOR AAL. POLY4 IS BETTER THAN A GOLDMINE AND THE LONGIVITY OF THE SUPPLY BEGGERS BELIEF.
You’re wasting your time with setting an order.
Try buying 1/3 of your possible total cost your prepared to buy in BP, and top up with the 2/3 if and when it drops 10%. It will happen, as stocks don’t always go up for ever.
This is not environment for orders.
Best of luck.
Buy order set 2245p
Thanks fromage.