EQN - I believe EQN has been oversold following the LUN bid, and inclusion of EQN into the ASX 100 (small cap managers selling). In my view the pull back represents a buying opportunity on a 12 month view. The LUN deal would lower our NPV for EQN by around 8%, but lift our EPS by ~10%. While the risk profile of the company would increase, we believe the current share price factors in zero value for Tenke post the deal going through. Further, i believe the debt can be well managed through the sale of Zinkgruvan, cash flow from operations, and high demand from corporate bond investors. Buy.
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