business commentators have been in a lather over BHP-Billiton’s $9.2
billion splash on WMC Resources, with opinion divided between fears the
Big Australian is going over the top and claims it is picking WMC
Resources up on the cheap.

The Australian’s Robert
Gottliebsen is a stand out. He leapt from commentator to unofficial
campaign manager against Xstrata-Glencore and even played a starring
role when 4 Cornersentered the fray last month. Half a million Australians saw whispering Bob on the ABC saying things like this:

“Never in our history have we had such a strong
position in a growth market as we’re going to have in uranium. Now,
it’s also a very sensitive metal because it can be turned into bombs.
It can be used for very bad practices, and we’re going to give control
of that mineral, a third of it, a third of the total world resource, to
a company whose major shareholder, and whose marker, and also based in
Zug, did, in fact, make its money out of breaking embargoes in Cuba and
South Africa and Iran, and possibly — we’re not sure of this — in

Not surprisingly, Bob is delighted with BHPB’s move, but still reckons WMC is being bought on the cheap. He opened today’s column
as follows: “Rio Tinto chairman Paul Skinner and chief executive Leigh
Clifford are in deep strategic discussions about whether Rio can afford
to let BHP buy WMC at such a low price.” But he did acknowledge the
divergent views: “Conversely, many analysts and newspaper commentators
say BHP is paying too much and think Rio is simply laughing at its

John Durie in the AFR was on the other side of the
debate yesterday, writing that BHPB came to the party too late and
“offered $1.2 billion more in the process than it needed to”. Still,
what’s $1.2 billion when your market capitalisation is $115 billion.

The SMH’s Liz Knight had the best of today’s commentary with this measured column while The Age’sStephen Bartholomeusz
was his usual thoughtful self: “Even if he (BHP CEO Chip Goodyear) has
overpaid by, say, $500 million — or even $1 billion — not only would
that be insignificant in the context of the group’s value, but it would
probably be insignificant in the context of the long-term portfolio
benefits and strategic options the inclusion of WMC would generate.”

patriotism has predictably raised its head with BHPB chairman Don
“Don’t Argue” Argus telling the AFR this morning, “I am a very proud
Australian and don’t retract that at all. But to suggest I put
nationalistic interests above economic interests of shareholders shows
little regard for my record”.
So what is the Argus record on patriotism? When the
BHP-Billiton merger was negotiated he insisted the head office be in
Melbourne and this was one of the points of difference that led to the
sacking of former CEO Brian Gilbertson. As National Australia Bank CEO
Argus bought up big overseas on the likes of Michigan National and
Homeside but there was never any suggestion of NAB moving offshore.

Brambles chairman he drove the dual listed company merger with UK-based
GKN but insisted incoming CEO CK Chow relocate from London to Australia
to run the company. Interestingly, he also put a stop to advanced plans
Brambles had to relocate to Washington — a decision that led to the
departure of highly regarded CEO John Fletcher, now the boss at Coles
Myer. This is what John Durie wrote in the Fin Review at the time:

Brambles’ last-minute decision to cancel
plans to move its management to the US has cost it its long-term chief,
John Fletcher, and yesterday $887 million or 7% in value.

At a
time when executive bags were being packed for the planned move of
senior executives to just outside Washington and after shareholders
were all told about the move the Brambles board in May pulled the pin
on it. The stated reasons, potential tax consequences, were apparently
known for some time, but the probability of negative US tax rulings was
always considered low.

However, the board, now under the control
of a belt-and-braces banker in the form of Don Argus, decided that
while the chance of a bad tax ruling was small, if it happened, the
penalty would be in the hundreds of millions of dollars and it simply
was not worth the risk. Fletcher, it seems, preferred the US despite
the tax risk and there is no doubt that if the move went ahead, he
would have stayed on for at least a couple of years to settle the

Okay Don, we’ve looked at your record and we reckon you’re patriotic.

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