Wouldn't really trust the ASX short list as the number of unreported shorts (usually covered with custodians and those types) far, far exceeds those reported on the ASX list. Plus that's the way the serious fella's like hedge funds do their shorting...
All it would take is for a small disruption to supply somewhere and BOOM! zinc prices will rocket. Many analysts are already revising their figure downwards for the zinc surplus. Whilst it's not a great thing to be so heavily leveraged to zinc price that goes the same for any 1 commodity, be it zinc or be it copper. A merger with ZFX makes it that much easier to diversify further. Even taking into account the purchase of AGM (which adds nickel to the equation) the money they'll be bringing is still quite substantial. From memory (I'm tired and I can't be bothered looking it up) the AGM cost less than $1bn, so they've still got $1bil sitting in their bank accounts plus you've also go the cash cow that is their century mine. Even if ZFX doesn't have much near term growth potential it's still prdocuing a tonne of cash (it's one of the top yielding companies in the top 150 stocks, and that's without even dipping into the proceeds from the Nyrstar sale).
Personally I hope the merger goes through ok. A takeover of OXR pre-merger I believe, whilst providing a big premium to the current price, wouldn't provide anywhere near the potential of the merged group. I reckon you probably wouldn't get much more than $5 a share for OXR in a takeover (which would be an all cash takeover), whereas I see $6 per share by the end of the year for the merged company, minimum!
Lastly, a lot of people keep saying how the takeover's a terrible idea, and OH should be CEO of the combined group since he's such a great CEO, he hasn't let you down before... OH would have had to be intimately involved with this whole deal. He wouldn't let his baby merge with another company if ultimately he thought it wasn't a good deal for the Ox, nor would he agree to this if he thought it would erode value for OXR share holders. If you've trusted him so much so far, and so much still that you want him to be CEO then why wouldn't you trust him when he says this is to the benefit of OXR and that AM is the right man for the job? I've trusted him so far, I believe in the merger and I trust in OH still.
I started buying ZFX pre-bid (though I have a larger holding in OXR) as it only seemed a matter of time before there was a coming together of these two companies and figured if I held both sides I'd be able to arbitrage the whole deal no matter who bidded for whom. If I had the money available I'd be buying into ZFX to take advantage of the discount that's currently on offer.
Anyway, just my 2c.
As I'm about to log-off before I fall asleep in front of the computer the Dow is up, copper is up and zinc is up. Bodes well for Monday. Dow seems to be coming down off its strong open so fingers crossed it'll stay up along with the two metals. Our miners need a break after the last week.
OXR
oxiana limited
