Mick Davis, chief executive of Xstrata, will be hoping he can make it third time lucky in Western Australia with yesterday’s £1.4 billion bid for Jubilee Mines, the Perth-based nickel producer.

Having been outbid for WMC Resources two years ago and LionOre Mining in May, Mr Davis seems to have a better chance of closing a deal this time round. The offer appears to be the outcome of a blind auction, so it must be assumed that the likes of BHP Billiton, a partner of Jubilee in Australia, or Russia’s Norilsk Nickel, the successful suitor of LionOre, either declined to participate or were firmly outbid. Xstrata’s approach of A$23 a share in cash, a 35 per cent premium to last week’s closing price, might seem hard to top.

Perhaps more persuasive is the apparent strength of the lockup agreed by Jubilee’s board and directors, who have committed to sell their 17.5 per cent stake to Xstrata at the agreed price. Unless a rival is content to fall short of full control, or is prepared to buy the directors’ stock from Xstrata at a higher price, Mr Davis would appear to have prevailed.

So what does Jubilee bring to the London-listed behemoth? As this month’s go-ahead of its Koniambo project in New Caledonia demonstrates, Xstrata has big ambitions for nickel in Australasia. However, that $3.8 billion (£1.9 billion) open-pit venture is not due to enter full production until 2013, meaning Jubilee will usefully fill a gap. Its target operates the Cosmos nickel project, but also has high-grade sulphide prospects elsewhere in Western Australia. By 2011, Jubilee is expected to produce 30,000 tonnes of nickel a year, a significant addition to the under 90,000 a year currently produced by Xstrata. Jubilee would also helpfully feed Xstrata’s currently underused nickel refineries. By most estimates, the company’s Nikkelwerk refinery in Norway will be short of nickel concentrate from 2009 onwards.

But if there is a concern with this deal, it is that Xstrata is paying a relatively full price. Nickel prices may have fallen from $50,000 a tonne to $31,000 currently, but Jubilee will only create value for shareholders assuming that prices remain above $25,000 in the longer term. Given that the mid-cycle price of nickel has been $13,000, the purchase of Jubilee is yet another sign of Mr Davis’s confidence in the commodities “super cycle”. But given his record in creating value from acquisitions he should be given the benefit of the doubt. At £35.76, or 8.5 times next year’s earnings, Xstrata is worth holding.

Chloride Group

At 193p, shares in the maker of power protection systems sit at their highest level in six years. Their strength at the tail-end of the dot-com boom was fuelled by premature hopes that Chloride would emerge as a key beneficiary of the internet economy, and yesterday’s first-half results show it to be delivering on that promise. Turnover has doubled over that period, while operating margins – up one percentage point over the past six months to a record 12 per cent – have nearly trebled. One reason is Chloride’s position in IT services, where, alongside Emerson of the US, it has emerged as a leading provider of uninterruptible power supply equipment to data centres. Sales from this niche, its biggest end market, were up 51 per cent, where there is a shortage of computing capacity to meet the demand for services such as internet banking and retailing. Yesterday’s evidence of progress in India, where clients include Dell, IBM and Microsoft, is also encouraging. Chloride has increased its stake in DB Power, its local partner, from 20 per cent to 32 per cent, indicating it is on course to assume majority control.

Chloride is also prospering outside IT. In oil, gas, and energy generation, sales were up 109 per cent, helped by the acquisition of Masterpower, which supplies oil platforms. Elsewhere, demand for control room kit from new power stations in India and China underpinned a 58 per cent rise in sales in Asia. At 20 times next year’s earnings, Chloride looks dear. But with earnings forecast to grow by 20 per cent, and a lag in service revenues providing shelter from any slowdown in product sales, that is reasonable. Hold on.

Lok n’ Store

If the board of Lok ‘n Store hoped to signal its confidence by declaring a maiden dividend alongside yesterday’s full-year results - its first in ten years as a public company – it appears to have worked. Shares in the AIM-listed self-storage specialist rose 4 per cent.

But as the 34 per cent drop over the previous six months indicates, confidence is something that has been sorely lacking from its sector of late. Along with rivals Big Yellow and Safestore, Lok, largely focused on the South East, has spent the past few years riding the residential property boom. It has benefited not only from its customers moving house, but also from those who have found moving into a large property prohibitively expensive, and have had to find an alternative home for their possessions. With 62 per cent of its sales drawn from consumers, fears of the impact of a housing downturn have inevitably taken hold.

Not that there was much sign of that in yesterday’s numbers. Underlying sales were up 22 per cent to £10.7 million, helped by rises in both price and volumes, with utilisation rates running at 85 per cent. Further, Lok’s new-build strategy has seen its adjusted net asset value (NAV) per share rise 27 per cent on the year to 270p. On measures of both NAV and enterprise value per square foot of space, Lok trades at a steep discount to its bigger rivals, which seems harsh. But it is sentiment on the housing market that is likely to remain key. Avoid.

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