Excuse me, but if the figuring in yesterday’s Sealed Section by an unknown analyst is right
about the worth of Olympic Dam and the effective
price that Xstrata is offering for WMC Resources, can anyone tell me
the difference between Xstrata’s Mick David and David Tweed?

Yes that Mr Tweed, the share vulture. After all, isn’t Mr Tweed really
a buyer of shares at less than market prices, or less than fair value
levels? And doesn’t he prey on people who are inexperienced, don’t know
any better and foolishly sell their shares without checking on the real

So to offer almost a dollar a share under the current price for WMC Resources, is to be a little Tweedish, isn’t it?

And if institutions and others accept the price from Xstrata, or any
other bidder that’s less the market price, don’t they only have
themselves to blame if someone offers more?
I know its a market and a takeover but those figures in the first
sealed section have caused the question to be asked, along with today’s
statement from WMC Resources and
today’s Chanticleer column in The Australian Financial Review.

WMC Resources shares reached $7.30 today, just after lunch, 95c above
the cheap as chips offer from Mick Davis’s Yaarpie, Swiss, British

Maybe investors and analysts read this in the sealed section – An astute mining researcher writes:

“Hi Crikey, just thought I’d add some figures for you regarding
production from our biggest mines mentioned in yesterday’s second
sealed section. The Golden Mile produced its 50 millionth ounce in 2003
– worth about A$28.5 billion today.

“By contrast Olympic Dam has produced over 1.7 million tonnes of
copper, about 1 million ounces of gold, about 30,000 tonnes of uranium
and about 6 million ounces of silver – worth about A$9 billion today.
Current resources at Olympic Dam now have a staggering A$326 billion of
in-ground metal value.

“Did I hear that Xstrata want to buy a 50 year-plus revenue stream
based on that for just A$7 billion (or 2% of its present value)? Come
in spinner.

“Fund managers and institutions need to get their act together and tell
the Swiss to get lost. We’re going to lose another world class miner
(and the profits that go with it) because of myopia.”

Good stuff, buying something for only 2% of net present value(roughly)
it does sounds very Tweedish to me. If anyone like Tweed offered people
something 95c under current market price, serious investors and
commentators and analysts would scoff.

So why not now?

It was also nice of John Durie in Chanticleer to climb down off the
Xstrata-fed high horse of belting WMC resources over its poor
disclosure, governance and managerial situation in the past. We can’t
bring you the full Chanticleer because it’s in the AFR’s premium site
and we don’t believe in helping finance Fred Hilmer’s Golden Goodbye
any more than we already do.

But here’s a couple of good points from Durie who rightly serves it up
to Hugh Morgan, the former head of the old combined WMC and now present
President of the Business Council.
“WMC wrestles with Morgan legacy” was the headline and that summed up
the situation poor Andrew Michelmore finds himself in, weighed down by
the almost terminal underperformance of Morgan in so many areas.

Durie singles out the split-up of the company, the historical links to
the old Collins House group that Morgan had, and the management regime
run by Morgan in his (too long) time at the old combined WMC.

Today’s statement from the company contained all the expected phrases
in a near hostile bid. “Don’t talk to them, don’t sell, don’t sell,
listen to your board.” Well, yes!

The scheme of arrangement proposal has gone by the board, given that it
was impractical, and you only get one Leo Tutt in your life( he was the
chairman who handed MIM over to Xstrata and now has a low profile to
avoid the ridicule).

Perhaps the best comment from Durie who, in pointing out that
Michelmore had opposed the split of the old WMC, said the WMC resources
chief is now bridging the “credibility gap left by his predecessor.”

And Morgan has the hide to be complaining about the short tenure of
CEOs, the performance of shareholders at annual meetings, and wanting
the Federal Government to toughen its industrial legislation.

The best comment about Hugh Morgan this week has come from Peter Morgan at 452 Capital in a letter to the AFR.

Morgan has a bit of a barrow to push, but it was very effective two
fingered salute to the Great Hugh.This also from yesterday’s First
Sealed section.

“Great to see the Collins Street-led Business Council of Australia
crying poor once again about chief executive tenure following the
release of the annual Booz Allen Hamilton Business Council survey.

“Comrade Hugh Morgan do you really expect shareholders of AMP, ANZ, BHP
Billiton, CSR, David Jones, Fairfax, Lend Lease, National Australia
Bank, Orica, Santos and Westpac to feel any sympathy for such reports
when changes of chief executive clearly have been for the better over
the past decade?

“When you get off your soapbox, Hugh, perhaps you should get your
consultants to study a company like Rural Press. Over the past 10 years
shareholder returns (share price and dividends) at Rural Press have
quadrupled while the remuneration of the long-service CEO and the top
five executives hasn’t even doubled. And despite these excellent
shareholder returns the chief executive still gets paid less than

“Contrast this performance, reward and tenure with some of the
ridiculous payments for non-performance that some of your white feather
members have overseen over the years and it’s little wonder that many
Australians have so little time for your organisation’s
self-patronising studies and comments.”

Sometimes it’s the managerial abilities of the Hugh Morgans of this
world that make the David Tweeds and Xstrata’s of the world inevitable.