Lure of Anglo’s copper mines could test BHP’s spending resolve
BHP needs to offer at least a 40% premium over Anglo's share price for a new takeover bid, but its CEO has committed to spending discipline.
Motley Fool puts Saskatchewan’s Potash Corp. through the Warren Buffet test this week. Ilian Moscovitz of the investment site rates the world’s biggest fertilizer manufacturer in terms of the criteria – consistent earnings, good management and a simple business among others — laid out by the legendary investor in Berkshire Hathaway’s most recent annual results filing.
There is renewed interest from investors in Potash Corp., which operates six mines in the Canadian province, on the back of rising global food prices, record earnings at the company, and after BHP Billiton’s nearly $40bn hostile takeover bid was scuppered by the federal government in November last year.
“Regardless of whether Buffett would ever buy Potash, we’ve learned that while the company’s earnings are somewhat volatile and debt it a bit higher than peers’, it does exhibit many of the other characteristics of a quintessential Buffett investment: high returns on equity, a simple industry, and tenured management.“
