The Inco - Vale deal:
Inco is worth more than the offer of 86 canadian dollars from company Vale. Nickel costs now above 30000 dollars a ton, at the end of last year, it costed only 13000 - 14000. Inco's quote is not reflecting this nickel price increase. I am sure that if Inco's shareholders don't accept the offer of 86 dollars, the company Vale do Rio Doce will come with a bigger offer (higher price).
I think that three things some investors are not seeing.
1 - The possibilty of explore (assault) customers during a long time. In 2005, Vale increases the price of iron ore by 70% and I think new concurrence will arrive only at the end of next year. If Vale does the same with nickel, the new concurence will arrive only after 5, 7 or more years after.
2 - The reserves in south Asia. Vale isn't looking to canadian operations. This is nothing compared with the reserves in south Asia.
3 - The "know how". Vale has nickel reserves in Brazil, but they don't have technology, know how to explore nickel. They expect to achieve this know how buying the company Inco.
For these reasons, I think Inco's shareholders can receive far more, more than 100 ir they don't accept Vale's offer of 86.
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