I wonder how many of the key decision-makers in Rio Tinto actually have any idea who owns the company they work for.
Chairman Paul Skinner definitely doesn't own it.
Nor does CEO Tom Albanese or CFO Guy Elliot.
This may be suprising to some around here - most likely the management staff - but guess what, they don't even own the majority of this resource monster. Although I'm sure many of you get the impression that they think they do. But in reality a large proportion of company ownership is held mostly through Superfund holdings that are invested through managers across this - and many other - nations. Without support from these Superfunds any large company will wilt. That's why CEOs travel the world shoring up support from the big superfund managers.
And guess whose money runs the superfunds?
Yep ... YOURS
We all own this company ... and many others like it. Who woulda thought it, huh?!
So next time you don't agree with a dumb-arse management decision try this response:
"Hey, listen up, I own this bloody company, mate."
2 comments:
Sydney Morning Herald report today suggests BHP planning move on Rio over weekend but new players have moved into the fun! Chinalco and Alcoa bought12% share of Rio - is it a move to stop BHP. Interesting times ahead especially when "BHP expressed a willingness to allow Rio managers to hold some of the top jobs in the enlarged group, and for a combination of the two boards" - who will own Rio when all this is over?
There's been speculation about the future of Rio for some time.
Let's throw back some 6 to 8 months ago when the BHP takeover was rumoured in the financial press. Obviously with the large cash flow that Rio generates (about 12billion/annum) it was always going to be a takeover target - especially in a commodities super-cycle. If BHP weren't going to take a shot then of course the Private Equity boys were.
Of course now we have the private equity boys involved directly with China via Blackstone and the Sovereign Funds, so that may factor into the equation - thus the possible blocking element to the sale. It makes sense for China to make a State investment in Rio to cover their backsides in commodity prices. China is a huge market for Aluminium and Iron Ore. They will not want a virtual monopoly player dictating commodity prices.
A BHP/Rio merger will result in a massive resources giant. Sure management jobs will be on the line - a further streamlining of all upper echelon positions will take place as they seek to find all available synergies to cut costs. There can be only one CEO, one CFO, one Chairman.
The board of directors are supposed to vote in favour of the best shareholder return. What will that be? Well, in all likely-hood this will probably amount to four and a half BHP shares for every single Rio share. Wait for the BHP proposal on the 6th of Feb.
Look for the state of play over the weekend with overseas markets and see what happens Monday morning with the ASX. Rio is definitely in play despite the market upheavals at the moment.
It's a new dawn in the mining era. Welcome to what may be a historic moment in corporate history. A BHP/Rio merger may very well be the beginnings of the world's largest public company.
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