[miningmx.com] – Mick Davis, founder of X2 Resources, is considering a bid for South32, BHP Billiton’s proposed spin-off company, which has shed half its value amid plummeting commodity prices.
Citing people familiar with the matter, Bloomberg News said Davis was considering using X2’s untapped $5.6bn in funds, combined with debt, to bid for South32 which was valued by Deutsche Bank at $7bn, half its worth when the idea for the spin-off was first mooted.
“Mick Davis is very shrewd,’ said James Santo, a special situations salesperson at Aviate Global. “Being in a trough is not great timing for South32’s valuation. They are spinning off the most cyclically-leveraged assets at the bottom of the cycle.’
According to Bloomberg News, Davis bid $10bn for most of South32’s assets last year and was considering making another provided it was less than $12bn.
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