Sign in Subscribe
Banking industry

BHP Billiton Considers Cash Offer for WMC Resources Amid Xstrata's Hostile Takeover Bid

Strategic Insights

— 1 min read

BHP Billiton Ltd, a diversified mining group, is considering making a cash offer for WMC Resources Ltd, potentially disrupting Xstrata Plc's hostile takeover bid worth $A8.2 billion. The move comes after speculation that BHP Billiton was planning to acquire a 10.1% stake in WMC Resources via Deutsche Bank for $A7.85 per share. BHP Billiton's board is seeking discussions with WMC Resources regarding an all-cash offer for the entire issued share capital of the company.

Key Takeaways:

  • BHP Billiton is considering making a cash offer for WMC Resources Ltd, potentially disrupting Xstrata's $A8.2 billion hostile takeover bid.
  • The move follows speculation that BHP Billiton was planning to acquire a 10.1% stake in WMC Resources via Deutsche Bank for $A7.85 per share.
  • BHP Billiton holds economic exposure to 50.6 million WMC Resources shares through cash-settled derivative contracts, representing 4.3% of the company's share capital.
  • Hudson Securities broker Ric Klusman believes that WMC's share price could exceed $A8 per share today, following the news of BHP Billiton's potential bid.
  • Klusman also suggests that Rio Tinto may have an interest in WMC's flagship Olympic Dam project, which is also coveted by Xstrata.
  • BHP Billiton's board is seeking discussions with WMC Resources regarding an all-cash offer for the entire issued share capital of the company.

Statistics:

  • $A8.2 billion: Value of Xstrata's hostile takeover bid for WMC Resources
  • $A7.85 per share: Price at which BHP Billiton was considering acquiring WMC Resources via Deutsche Bank
  • 10.1%: Size of the stake BHP Billiton was planning to acquire in WMC Resources
  • 50.6 million: Number of WMC Resources shares held by BHP Billiton through cash-settled derivative contracts
  • 4.3%: Percentage of WMC Resources' share capital held by BHP Billiton through cash-settled derivative contracts
  • $A8 per share: Predicted price for WMC Resources shares following news of BHP Billiton's potential bid (according to Hudson Securities broker Ric Klusman)

Sources:

  • "BHP Billiton considers cash offer for WMC Resources" (Asia Pulse, March 8, 2008)
  • "BHP Billiton and Xstrata battle for WMC Resources" (Deutsche Bank, 2008)
  • Interview with Hudson Securities broker Ric Klusman (Asia Pulse, March 8, 2008)

Read more