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Questor says BUY

As noted on 19 August: "Quaestor grew more in more uncertain as to whether the company will be approved and suspected that management believes it too."

Although the shares of both companies fell yesterday, falls were in line with the rest of the sector — as the dollar staged a rebound after the recent falls.

When the dollar decline, prices for raw materials tend to increase as they are less expensive in other monnaies.lorsque dollar rises, and prices tend to fall.

Joint venture would have resulted in $with (￡ 6 United) annual cost - which is importantes.Rio Tinto have also received a "equalization payment" savings BHP.

Indeed, the economies of the exploitation of iron ore were an important factor to consider when BHP bid for Rio Tinto all shares in November 2007 in the context of a market booming commodity.

Part of the Rio defense against the approach was that the Pilbara infrastructure and its operations were well above those of BHP.However, BHP walking away from any agreement that the credit crunch has caused the development of products to relax.

When the iron ore joint venture was announced, it is a moment of crisis for Rio.The company stock prices had plunged as the credit crunch hit because the group composing with approximately had been $ debt from its purchase of Canadian aluminium group Alcan.

To strengthen its balance sheet, Rio has accepted this group controlled by the Chinese State Chinalco would inject $19. 5bn in the company in return for a doubling of the participation of the Rio Group in 18pc.This caused uproar among other shareholders because it ignored their pre-emption rights and promoted a sole shareholder rather than another.

Due to the concerns of the shareholder, Rio has decided to walk further Chinese investment in favour of a question of rights and this venture with BHP.Il has been agreed that BHP would pay a sum of cash 5 $ 8bn in Rio at their operations "equalize".

Given that the transaction has been agreed, the iron ore market has stimulated and many Rio shareholders not would have been blamed for wanting higher equalization payment.

However, it is now a point moot .c ' was regulators who scuttled the agreement finally as the combination was too much for competition regulators European and asiatiques.Comme is a joint decision there is no tax payable break.

Thus, BHP and Rio will now she seule.Rio plans to expand production of 330 m tons iron ore per year by 2015 - up to 220 m tonnes maintenant.BHP Billiton plans to increase production to 240 m tonnes per year by 2014.Actions BHP may underperform in Rio, as is currently the first, in a situation of hostile bid with PotashCorp, resulting in uncertainty.

Rio shares are trading on earnings from December 2010 multiple 9.6, falling to 8.2 next year.

Shares increased 21pc since 4 may, when they were tipped title as a purchase to ￡ 33.79, compared to a market until 6pc.Les actions are still a purchase.

A club of hand, Garry white is a member, is the owner of 274 BHP Billiton shares.

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