As everyone probably knows by now BHP have lobbed a very real $25 bid in for OZL, over +32% above Fridays close although the board will point out that it’s not much more than +10% above the average price of the last 6-months i.e. there are lies, lies and statistics! The fact that the stock closed a few % above the bid yesterday tells the story of what the market believes will come next i.e. a higher bid.
- We reduced our 5% holding in our Flagship Growth Portfolio into yesterday’s +35% surge but the fact we held 3% illustrates we believe the stock will trade higher into Christmas. NB when we discuss position sizes, we are referring to the size of position at initiation. When we trim a stock, we do so by targeting a new weight. For example, we sold OZL down to be a new 3% portfolio weighting. In practical terms, a 5% position that had risen 40% was indeed at 8% of the portfolio.
MM believes BHP is keen to get the deal done and will ultimately pay ~$30, but there are always risks
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