Mike Davis of X2 Resources eyes South32 for purchase

BHP spin off company, South32 is weeks away from attaining an official listing and its valuation has already been reduced to almost half the original assessment at the time of conception. For Mike Davis, its current valuation of $7 billion (R84 billion) seems highly attractive as he is eyeing the company for a purchase.

South32 will handle the non-core operations of BHP including manganese, alumina and nickel and owing to the dipping commodity prices the value of the company has also been steadily plummeting making it a good time to buy the company.

Mike Davis and his X2 Resources fund are considering floating a bid for the company eventually according to people familiar with his plans.

South32 is currently suffering the worst slump that has hit the commodity market in the past half decade however analysts believe the state is temporary and the condition will improve when the prices recover.

Apparently Davis had bid for the South32 assets last year offering $10 billion but since the information was not made public not many know about it. His interests towards the company still remain strong and he is hoping to make a move post the company acquires a listing, as long as the price remains under $12 billion.