Give what names you wish to the Rio Tinto management, but the bitter reality is that a logical strategist derives no pleasure in realising that while Alcan’s shares were trading at just $61.03 per share on the NYSE (on May 4, 2007) before the share price was artificially puff ed-up due to the bid-war, Rio Tinto offered it a rollicking $101 per share (as on July 25, 2007) – a breathtaking
premium of 65.5% over its true value, perhaps in an attempt to wash away the competition!
Tom Albanese, CEO, Rio Tinto, tries to justify his company’s logic concerning ‘true value’ as, “We’re very comfortable with the fact that we’ve found the right balance between the compelling offer for Alcan shareholders & a Rio Tinto offer that’s consistent with our approach to value…” However, this too falls fl at when considered that the current market value of Alcan stands at just $32.92 billion which is yet again overvalued (as proven by the fact that Alcan share volumes traded rose by a deafening 1587.1% on the subsequent trading session after May 7, 2007) only due to the recent two-month long bidding rally as the total market value of Alcan was just $22.08 billion before the bid started!
premium of 65.5% over its true value, perhaps in an attempt to wash away the competition!Tom Albanese, CEO, Rio Tinto, tries to justify his company’s logic concerning ‘true value’ as, “We’re very comfortable with the fact that we’ve found the right balance between the compelling offer for Alcan shareholders & a Rio Tinto offer that’s consistent with our approach to value…” However, this too falls fl at when considered that the current market value of Alcan stands at just $32.92 billion which is yet again overvalued (as proven by the fact that Alcan share volumes traded rose by a deafening 1587.1% on the subsequent trading session after May 7, 2007) only due to the recent two-month long bidding rally as the total market value of Alcan was just $22.08 billion before the bid started!
For Complete IIPM Article, Click here
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2008
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Home Campus Tour Contact Us Sitemap IIPM Think Tank IIPM National Brochure IIPM in Media India Today & Tomorrow
Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com
Strategic Alliance / Consulting / Intellectual Tic-up Partners Arindam chaudhuri GIDF Planman Consulting Business & Economy 4Ps Business & Marketing The Sunday Indian The Daily Indian Kkoooljobs.com
