Good thread andrewe.
My opinion, previously posted, is that $1 ($780 million) is a fair price on the basis of everything that is known. It is not a lush offer but ZFX must be careful about not paying too much. A bit of a balancing act between allowing AGM shareholders to feel they have done ok and ZFX shareholders being satisfied. When I first posted in here I held neither but have now bought some ZFX over the last few days - prices a bit too good to run away from based on likely yield and cash backing. Now holding ZFX hasn't changed my opinion - AGM is a nice small company but not worth more than being offered on all currently known information.
Melua's last post was very interesting. It seems that the market is punting on a higher bid than $1 but not much higher. There also does not seem to be any expectation of a competing bid which is a shame for AGM holders but a boon for ZFX. This all suggests, quite correctly, that blue sky pricing on the basis of what may or may not be in the unexplored 80% (presumably the less obvious targets on initial surveys) would be inappropriate.
I initially thought it would take $1.20-1.30 for ZFX to take AGM out but the volumes of late suggest that there has been a fair bit of institutional buying. I'm with Melua - the institutions like an unconditional cash offer and they will be very shy of being exposed to a fall of a cliff. It's looking like $1 could do the job or at least create a strong beachhead.
What's going to be interesting is just what percentage ZFX initially emerge with - they would probably want enough to get on the board and then start picking off the balance.
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