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BHP Billiton Weighs in on WMC Resources Offer

Strategic Insights

— 2 min read

The Square Mile was buzzing with speculation today as mining giant BHP Billiton considers pulling the rug from under Xstrata's £3.4 billion offer for WMC Resources. Xstrata had made the offer to WMC, owner of Australia's Olympic Dam copper and uranium mine, conditional on a price of A$7 per share, which went unconditional last week. However, BHP, with the support of Deutsche Bank, is reportedly set to acquire a 10% stake in WMC, potentially jeopardizing the Xstrata deal. This move has sent shockwaves through the mining sector, causing significant losses for BHP and Xstrata on the London Stock Exchange.

Key Takeaways:

  • BHP Billiton is considering acquiring a 10% stake in WMC Resources, potentially blocking Xstrata's £3.4 billion offer.
  • Xstrata had made an unconditional offer for WMC Resources at A$7 per share last week, which was seen as a significant move in the mining sector.
  • Deutsche Bank is supporting BHP in this deal, offering various institutions $7.85 to part with their WMC shares.
  • The mining sector is experiencing a downturn, leading to increased speculation and activity in the market.
  • BHP, Xstrata, and several other mining companies have seen significant losses on the London Stock Exchange in recent days.
  • Shares in Antofagasta and Lonmin have seen significant gains, with UBS raising its price targets for these companies.
  • The FTSE 100 index fell to 5024.8, while shares in the London Stock Exchange and Euronext have dropped due to concerns over the proposed bid.
  • Music publisher EMI has seen a significant increase in its share price, while Credit Suisse First Boston has raised its recommendation for the company.

Statistics:

  • Mining giant BHP Billiton is set to acquire a 10% stake in WMC Resources.
  • Xstrata's £3.4 billion offer for WMC Resources is conditional on a price of A$7 per share.
  • Deutsche Bank is offering $7.85 for various institutions to part with their WMC shares.
  • The FTSE 100 index fell to 5024.8 in response to the mining sector downturn.
  • Shares in BHP Billiton and Xstrata have seen significant losses.
  • Shares in Antofagasta have risen 17p to 1367p, while Lonmin has gained 18p to 1042p.

Sources:

  • BHP Billiton - the article's primary source for the information regarding the mining giant's acquisition plans for WMC Resources.
  • Deutsche Bank - the article's source for the information regarding the bank's role in supporting BHP's acquisition plans.
  • London Stock Exchange - the article's source for the information regarding the impact of the mining sector downturn on the FTSE 100 index.
  • Euronext - the article's source for the information regarding the concerns over the proposed bid for the London Stock Exchange.

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