Johannesburg — XSTRATA's effort to merge with Anglo American is still, in my view, a nonstarter. As you would have read in colleague Charlotte Mathews's story in Wednesday's Business Day, Xstrata's board disagrees and the company is spending a lot of money and management time to keep the proposal alive and well.

When the proposal was floated, Anglo's share price and trading volume surged. Since then, the trading volume and price trend have fizzled. The market's view, I guess, is much the same as mine.

I also doubt that the support of former Anglo deputy chairman Graham Boustred for Xstrata CEO Mick Davis significantly affects market sentiment.

Boustred's support of Xstrata, reported in Michael Bleby's feature on Wednesday, was a remarkable and incisive insight into the mindset of Anglo management of yesteryear. Many shareholders, especially those former employees who were rewarded with shares for their services, may still be applauding Boustred. They're all probably still moaning about the passed final dividend and at least a few of them believe a woman isn't capable of managing a mining business.

Whether you were amused or angered by Boustred's interview, the important investment fundamental remains -- Xstrata wants to manage Anglo's assets. Anglo may have to spend a lot of money and management resources to counter a formal bid. This could adversely affect earnings. Worse still, part of the counterattack could be an invitation for a white knight to take a significant stake in Anglo's equity. Such a stake would make it difficult, if not impossible, for Xstrata to receive approval from a majority of Anglo's shareholders.

If a concrete bid is made, I'm counting on the Competition Commission to find good reasons to reject it.

White knights, as major minority shareholders or controlling shareholders, are a risk. Either way, they influence or direct corporate strategy. Anglo's focus, which angers Boustred and others who prefer a conglomerate spread, may not be quite right. I'm not, for example, convinced that Anglo should still be in the diamond business.

Anglo was largely forced to be a conglomerate for political reasons. Its mining revenues were the rump of its gold-mining operations, a resource that was dwindling. It had to acquire new assets to substitute and improve revenues. It could not expand internationally. Hence it created Anglo American Industrial Corporation (Amic). Anglovaal, its major rival, did much the same. Non-mining companies, such as SA Breweries and Liberty Life, with similar restrictions on geographical expansion, also diversified into noncore businesses.

These investments had mixed fortunes, mainly -- my experience tells me -- because they didn't always know how to manage these diversified businesses -- their business management expertise had been built on their core operations. What did Anglo know about the food business or, for that matter, how to build and sell motor cars?

Yes, Boustred should emigrate to the Isle of Man. There, in his centrally heated home, he will be safe from contact with blacks and Muslims and probably won't notice that there are two separate communities in the island's population -- the white Manx natives and the also-white "come- overs". He will be part of the latter, and mostly wealthier, tribe. Much as it used to be here.