02/11/2004 - 21:00

Mixed response to Xstrata tilt at WMC

02/11/2004 - 21:00


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Mixed response to Xstrata tilt at WMC

THE possible sale of WMC Resources to Swiss-based commodities trader Xstrata has drawn a mixed response.

Politicians, who are usually loathe to comment on commercial transactions, have expressed disappointment at a possible foreign takeover of the historic mining company.

However, local analysts and commentators are more welcoming saying investors would probably welcome a bid.

WMC last week said it had rejected a $7.4 billion bid from Xstrata, however, it is rumoured Xstrata or another company is preparing to bid again.

State Development Minister Clive Brown said the WA Government and WMC had been working cooperatively on a range of matters to mutual benefit.

”It would be disappointing if that level of co-operation were to diminish – for whatever reason,” he said.

Opposition resources development spokesman Norman Moore said it would be sad for a company such as Western Mining, which had a long history in WA, to be taken over by a foreign company.

He said Xstrata’s recent history in WA “had been pretty average”.

Xstrata’s recent dealings in Australia and particularly WA, have included its low-ball bid for Mount Isa Mines and, more recently, its controversial decision to close the WA vanadium mine, Windimurra.

However, Hartleys analyst Jonathon Battershill said most investors would probably welcome a higher bid. He said shareholders probably would have accepted a $10.23 bid from US giant Alcoa before WMC’s demerger two years ago, however, the WMC board did not ask them.


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