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Alternative bidder could pay more for Xstrata – HSBC
February 08, 2012 - 12:23 GMT
Location:
London
KEYWORDS:
HSBC
,
copper
,
Xstrata
,
Glencore
,
merger
Xstrata’s assets could be worth far more if an alternative cash bidder could be found for the company, either as a whole or for parts of the business, an HSBC analyst said in a note.
“We highlighted in our recent research that Xstrata’s copper assets in particular would be in high demand,” the analyst said.
“Taking recently paid transaction prices as a benchmark, Xstrata’s copper business alone could be worth about $50 billion, equivalent to 69% of the group’s [estimated value].”
Nonetheless, it would be difficult to find an alternative bidder, he added, and that the deal is taking place “in the universe of the possible”, in the words of Xstrata ceo Mick Davis.
“We note that, on our estimates, the copper business just accounts for 47% of 2012 [estimated] Ebitda [earnings before interest, taxes, depreciation and amortisation]; therefore, substantial additional value should be attached to the remaining assets,” the analyst said.
Much has also been...
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Euromoney Institutional Investor PLC.
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