for sale, page-33

gm is going to Japan next week so deal is at least few weeks away and uncertainty still remains..
well the only one UBS support is gone as well...


Murchison loses support of UBSPETER KLINGER, The West Australian
July 8, 2011, 7:21 am tweet0EmailPrint
The West Australian ?

Murchison Metals has lost the backing of one of its most loyal supporters after influential investment bank UBS slashed its target price for the embattled Oakajee port and Jack Hills mine proponent by 77 per cent and axed a long-standing buy recommendation.

After restating its buy recommendation with a $3 share price target on Monday - the day Murchison admitted it would not be able to meet its Oakajee and Jack Hills funding requirements - UBS on Wednesday slashed its tip to neutral and the target price to 70?.

In doing so it belatedly followed most other investment banks that reacted to Murchison's financial constraints admission on Monday by slashing their recommendations and target prices.

Murchison shares fell as low as 56.5? following Monday's shock announcements, which included confirmation that the cost of the Oakajee Port and Rail development had soared to $6 billion while Jack Hills would cost $3.7 billion.

In addition to the downgrades there was talk Macquarie Securities had offloaded a big line of stock on behalf of a client, which created downward pressure on Murchison's share price. The shares were worth $1.50 five months ago.

Murchison's shares recovered 5.5? yesterday to close at 71.5?, just above UBS' new target price. UBS analysts led by Glyn Lawcock said the reason for their changed investment outlook was because of "material changes to the investment case post (Murchison's) announcement (on Monday)".

"Our prior rating was buy although we have consistently highlighted that the culmination of the feasibility study and funding proposals constituted a high risk and binary outcome," UBS said.

"Post (Monday), we believe monetising the potential upside has been materially impaired."

UBS estimated Murchison's share of equity funding for OPR and Jack Hills at $2.2 billion but said a residual cash contribution from joint venture partner Mitsubishi may total only $1 billion. It would leave Murchison with a cash shortfall of as much as $1.5 billion.

Murchison is yet to detail the size of Mitsubishi's cash contribution but has confirmed the amount will not cover its equity commitments for the two Mid West projects.

Murchison has asked Rothschild and O'Sullivan Partners to carry out a strategic review to devise funding options. Asset sales are expected, with its stakes in OPR and Jack Hills the obvious targets.

New managing director Greg Martin, who took over from Trevor Matthews on Monday as part of a boardroom restructure, has been meeting investors in Sydney and Melbourne and next week heads to Japan for talks with Mitsubishi.






http://au.news.yahoo.com/thewest/business/a/-/wa/9806258/murchison-loses-support-of-ubs/