Here’s some juicy stock market RAW to kick off 2011 — Carlos Slim, the world’s richest man is looking to enter the silver market in a big way.
And that big way, according to KingWorldNews, is a bid for Fresnillo, the Mexican based mining company that is poised to become the world’s biggest silver producer.
A source in mergers and acquisitions out of Europe has alerted King World News that Carlos Slim may be looking to enter the silver market in a big way. Gold and silver are in big bull markets and this is attracting the attention of some of the smartest money around the globe.
The European source commented, “This deal has been floating around for a while, but I think this time it is going to happen. It’s in his backyard. This is the world’s richest man wanting to get into silver.”
I view this as the only way for the richest man in the world to enter the silver market at this point in terms of any scale, is that your take as well?
“Yes, I agree with that. Let me just add that when he buys into it (Fresnillo) he will have the leverage to silver he is looking for. There are very few ways to get into silver with the amount of money he has, this is the most likely option at this point. He has to pay a hefty price or otherwise the deal will not happen. It is beginning to look like the longer he waits, the more he will have to pay. It is a bull market and things to tend to get more expensive, not less.”
Now, Slim would certainly have to pay a hefty price to take control of Fresnillo. The company is currently controlled by the Peñoles mining group, which in turn is controlled by another Mexican billionaire, Alberto Baillères.
Baillères also doubles up as Fresnillo’s chairman and has never shown any desire to sell up. That could change, of course, if Slim offered a knock out price but what would that need to be? £25 a share? That would value Fresnillo at almost £18bn. Is that a cheque a shrewdie like Slim would be willing to write?
Furthermore, this rumour has been doing the rounds in London for over six months without any confirmation.
Still, the market seems to believe there could be something in the speculation if Tuesday’s price action is anything to go buy.
But then again…
Fresnillo is a very illiquid stock — Peñoles owns 77 per cent of its share capital — and the price of silver has hit a 30-year high of $31 an ounce.
All of which could be contributing to this morning’s spike which has carried Fresnillo to the top of the FTSE 100 leaderboard.
Update: 11:01 (GMT). Forgot to mention that the KWN report was first picked up by ZeroHedge.
Related link:
JPMorgan cuts back on US silver futures – FT Alphaville