Resources Take Centre Stage Post Jubilee Offer

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By Rudi Filapek-Vandyck

Resources stocks are likely to take centre stage on the Australian share market today following the announcement of a takeover bid for nickel producer Jubilee Mines ((JBM)) by Swiss based Xstrata, analysts said.

They said the $23 per share offer for Jubilee was likely to trigger share price rises for other nickel producers, as well as for near term producers such as Allegience Mining ((AGM)), Albidon ((ALB)) and Mirabela Nickel ((MBN)).

One analysts believed Sally Malay ((SMY)) would be among the biggest beneficiaries stating if its shares would be valued at a similar multiple as implied by Xstrata’s bid for Jubilee, Sally Malay shares could be worth $6.86.

The overall sense, however, was that the direct impact from Xstrata’s offer would not remain limited to the nickel sector only.

One theory doing the rounds is that BHP Billiton ((BHP)) may well decide to trump Xstrata’s offer as Jubilee currently has a concentrate contract with the Big Australian who may want to protect its position.

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