takeover, page-6

Seriously though, considering that TPG and co bid that much for Asciano today....I wonder if the bigger miners got rocks in their head.

Company is trading under 6 billion POST merger, with a billion plus in CASH and no debt.

It's almost self funding in the good old days before the credit crunch.

Its probably calling the bank up and saying listen, I wanna buy this company right, but I got no money. I need to borrow 5 billion dollars.

The bank says yeah no probs son, give us a billion in security cash, and we will lend you 4 billion....80% lvr. Actually credit crunch the number to 50% lvr, you need 3 billion to buy a 6 billion dollar company.

But wait. the company in question ALREADY has a billion dollars.

At 50% LVR, 2 billion gets you a 6 billion bid for OZL right now.

2 billion.

I want to drive that home for a minute. If FMG raises 10pct of its market capitalisation, it can have a tilt at OZL. at 50% lvr.

2 billion.

Thats 15% of BHP's YEARLY earnings. 8 years of Century, and 2 promising copper mines on stream for a long time to come....all for reducing your profits by 15%.

2 billion.

Thats a LESS that what TPG bid for Asciano today.

I want to stress this for a minute.....with 2 billion dollars, you can actually GET funding to bid for OZL, and it would be a real bid.

Twiggy Forester could make a bid, on his own. Seriously.

Think about it for a second. All it takes is 2 billion dollars to bid for OZL. You won't get it, but you know what....its a real bid. Not some ridiculous low ball bid. Its real. thats 2.10 or something, 10 pct above market price.

If everyone in Australia put 10 bucks into an OZL fund, that fund could bid for the whole company.

If 2 million share holders put a thousand bucks in, and pooled it together, you'd be able to bid for the company.

If 200 rich kids pooled their pocket money and trust funds and contributed 10 million each, you could bid for the company.

If 20 tycoons got together and injeced 100 million cash each (imagine how many chinese private people would have that lying around), they could own a third of the world's zinc supply.

Just to put things in perspective, and recap...

a) market cap < 6 billion
b) NO DEBT
c) 1 billion in CASH
d) at LVR of 50%, you could launch a FULL BID for a combined entity of OXR and ZFX's assets and project pipelines AND that billion in cash for 2 billion dollars.

So much for value funds. They should pay me.