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July 9, 2008 Dear Client, We modelled Vale three different ways -- without the $15 billion offering, with the $15 billion offering and with a doubled $113 not $59 billion five year capital outlay program. It seems as though Vale is making itself strong enough to make a counter bid for Rio Tinto with 25% to 35% cash portion if it so chooses. Alternatively, it could bid for "pieces" antitrust authorities make BHP or Rio Tinto sell, bid for Anglo-American, more than double its capital outlay ambitions or seek smaller targets. Vale clearly chooses to maximize its flexibility. Faithfully, John C. Tumazos |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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