Rock, I have to agree with your intuition on this. Given the current cash flow and cost of money, with very strong earnings momentum going for CLF at a multiple of the megamajors, an all stock deal at say $110 to $120 equivalent should look really good to CLF's institutional holders , and especially good if well within 2010. A major would IMHO want to spring this before June 30 earnings which could easily take CLF to 80-85 with no TO talk. Weaker greenbuck really helps too. Any one of VALE, BHP, or XSTRATA would find this cheap, but needs to go high enough to not protract a bidding war. (If there is one place that Ontario will outshine for a long time, it is South Africa. XTA's beancounters have lots of numbers to crunch, as do the others. BHP already has substantial US and Cdn ops, as does VALE. Only those three could stay with a top bid IMHO.)

BTW, The Thursday takedown was much more high volume and chunky than ordinary trading, strongly indicating M&A activity. Perhaps someone simply spent a lot of $ to make a big point in a big hurry, strong indications of a shortening stroke on an M&A thrust. Just a cost of doing business. But they can only do it for a very short period before management says "Screw you guys" and outright holds an auction. But, management must have been a little spooked by Thursday's trading. Something I believe is cooking and I would give it less (maybe much less) than a year to play out. Nobody would be shorting this for long without a plan.

BTW again , if someone threw a chunk of cash into the mix late on Thurday and Friday, they would just add it the cost of a deal. Fortunately, high inst ownership protects retail right now. The only thing I hated about adding Thursday and Friday was having to part with some other really good stuff.:)