Sims Metal Mangement...or perhaps something else?

The definitive merger agreement announced today between MM and SGM.AX (see below) is a fantastic deal for both parties.
http://biz.yahoo.com/bw/070924/20070924005876.html?.v=1

I listened to the call today and there was some body language that I think is going to spill over into a bidding frenzy. I think the WSJ did a good job covering the story today, but I didn't hear a peep about it on the tube today. No worries, because I'm sure some private equity and hedge fund players took notice. That's right the big money. I've written plenty privately about the valuation of MM based upon comparable industry metrics and it's grossly undervalued. On a P/S of 1 it's worth around $92.45 and that would represent an 89% increase. Now that's where the action will be, because while Monday's premium of 18% and retained interest in the company is nice; cash is king! Now CIBC played advisor to the deal (Dienst's Alma mater) but he has ties to private equity via Apollo Group. Dienst was director for Metals USA which was bought at a cheap premium for 22$ cash.

When pressed on the call today by the GS analyst about whether they looked for other bidders Dienst said, "are you gonna make an offer?!?" Followed with, "everyday we're open we're for sale." Now you see what I mean about a bidding war? This stock saw spectacular runs when it was fresh out of bankruptcy and there was a run on the stock by EMR and a Jennings (who was an ex-MM employee.) I think the speculation of another bid will make this one run past the implied 57 handle of today's deal. I find it funny that the only month with an 80 strike on the options chain is Jan 08. Not Jan 09 or Jan 10, but Jan 08. You think the specialist knows something we don't? Perhaps, but that's besides the point. The point here is those Jan 08 80s @.15 look kind of sexy right here. Volume is Nil on the contract with 10 traded thus far. With expiration 4 months out and the purposed deal set to close in Q1 next year this is a viable trade. Time decay will play a factor here, but if you can get a few tomorrow I think you can make some quick money on the options themselves.

I'm expecting a gap up in the morning to the mid 50's a few percentage points below the implied value of the deal. It gets trickier though because there are 1.6m shares short as of Sep. 14th. This will take 6.22 days to cover based on 269,000 shares average trading volume. So there is some fuel underneath the common to push it higher. Of course this is a fantastic deal put together by MM and SIMS......I'm just saying don't be surprised if another bid surfaces...there's plenty of people here in the US that need that scrap domestically.....think NUE or others.
Depending upon how MM opens and trades tomorrow there could be some pin action in SCHN, IDSA, and MEA to name a few. The market will tell us soon enough.