Hi Spekulatius - Any merger for AAUK is not really that good but the interest by Xstrata might spark other companies to look under the hood. China's state-run Chinalco might be quite interested in AAUK's iron ore and platinum holdings. As a shareholder, I want to see my under valued company continue to grow and maximize it's returns on company owned assets. Fair value (based on AAUK's assets) for this shareholder is around $30.00/share. Anything less in a merger is a giveaway to the buyer.
Chinalco could buy a minority ownership position as a long term investment providing AAUK additional capital to buy some Canadian nickle and/or zinc mines. This would help diversify their iron ore, platinum, coal and copper holdings.
At current prices ($14.86/share) AAUK is still under valued. My last sale was a few shares around $33.75/share (6/27/2008). My last buy was around $10.00/share (01/13/2009). I think you picked up some shares below $9.00/share!
There recent acquisitions have worked out quite well but IMO are not at all fully valued especially their iron ore assets.
On August 5, 2008, the Company acquired a 63.3% shareholding in Anglo Ferrous Brazil SA, which holds a 51% interest in the Minas-Rio iron ore project (Minas-Rio) and a 70% interest in the Amapa iron ore system (Amapa). Anglo American acquired an effective 69.2% interest in the Amapa project during 2008. On January 26, 2008 the Company acquired the remaining 50% shareholding in United Marine Holdings. In March 2009, the Company sold its remaining 11.3% stake in AngloGold Ashanti Limited to investment funds managed by Paulson & Co In
With a long term threat of much higher inflation and a US $ that is debasing, AAUK provides an excellent hedge against inflation and continues to be a core portfolio position for me (currently makes up 6.6% of the portfolio). I like it when other companies see the same long term value as I do and are willing to pay big $'s.
Hopefully, no sale but an investment by a large silent partner. AAUK should continue to move much higher.
EKS
Anglo American Plays Hard to Get
By Christopher Barker
June 24, 2009
fool.com |
