French Connection

Source: Metal Bulletin, 29 June 2009

After a busy week in the mergers and acquisitions market, SFP Metals could be getting in on the fray, with director Nick French telling Hotline last week that the cobalt trading house is looking at buying an undervalued asset, albeit on a smaller scale than Xstrata ceo Mick Davis.

“Any suggestion that SFP is an alternative buyer for Anglo American is greatly exaggerated...however we have our sights on an appropriately symbiotic acquisition which we consider to be significantly undervalued at the moment. You will understand that we can say no more at present,’’ French told Hotline in an email.

French’s confirmation that SFP is looking at an acquisition followed an email that attempted to explain the recent absence of its weekly cobalt press review.

“SFP’s research department is currently fully occupied as a matter of commercial priority supporting a major investment project for the company and has thus been obliged to temporarily freeze production of the weekly SFP cobalt press review until this project is completed,” SFP researcher Greg Smart told his readers in the email.

The email sparked a flood of speculation, with traders reporting as much in the way of rumour as they did cobalt business.

If the market gossip is to be believed, SFP could be preparing to buy another trading company or a cobalt operation.

One source told Hotline that “something’s up there because they’ve really been keen to see prices going up recently”.

Cobalt market participants should know by now that it’s when SFP trader and long-time cobalt bull Stephen English isn’t keen to see higher prices that something’s really up at the company.

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