morning all, hi bizz and kal,well, if Stone did perchance...

morning all, hi bizz and kal,

well, if Stone did perchance eyeball a combined fml and cre - then they sure should get a copy of the Art of War - because if that is their goal then imo they have made their potential purchase a lot more expensive.

fml - I don't believe is vulnerable - cheap yes but not vulnerable (ok if you want to be augmentative - yes it looks it on the surface - but look a little deeper)

Once one announces a takeover - the real valuation process begins to take hold.

If you combine this process (most times it comes out in the wash pretty accurately) - with the fact that they have more or less made an enemy of every fml shareholder ------------ do you think we are going to give up smiling :) :) :)

First up, their first offer would have to be a doozy - or they would be laughed off the block - they would get some smaller traders but at least the larger holders I know wouldn't be interested (not including DB in this). My guess is fml would zoom up higher than the offer and then stubbornly sit there - but that might be wishful thinking on my part.
Remember - Aussies aren't all that good on the attack - but by god, you have to be brave to attack them if they have their backs to the wall, they will defeat you the vast majority of the time.

Most larger holders know what they have in fml - even if it is only market valued at a bit over $200m.

There was a good run down in gold producers in Potters mag. the other day - I didn't mention it because you can't even copy a line and I wasn't going to try and explain the graphs - but it told the story (imo) of why fml is the price it is compared to other goldies ---------- BUT fml was the dark horse to me - it looked to me that it would swamp most of the field in a year or so ----------- and I did try to look at it objectively - objectivity is actually how I could see why it was about 6c.
Most of the really big players just compare the numbers - and fml is running a bit different so the value doesn't show up in the numbers --------- have you noticed that analysis's get it wrong more often than right -- :) heres why - they don't look deep enough to know companies intimately. That's why sometimes companies get solidly rerated - because 'out of the blue' they come up with some big profit - that wasn't 'expected' - but that means only not expected by an analyst - not so unexpected by someone who studies the company closely.

Anyway - enough warble on that last bit - what I would say is that if you do subscribe to Charlie Aitken and you can get to that article - make sure you go to the detailed pdf report on goldies - it takes a couple of clicks but is really worth it.

So, do I warm to your theme bizz??? Maybe, prc backing and them looking for assets? - yes. Looking for bargain entries? - probable. Would have looked at fml? Probably - I would suspect the Chinese would look closer than an average analyst. Fml look cheap? Yep. Big upside? Yep. Slip in under the radar? Yep, I could see how they could think that.

So warm - yeh probably - but not hot.

Biggest problem? for a Chinese - how the hell do we manage these assets?

There in lies their biggest dilemma - and making enemies of the very people who know how to run the business is a fatal error.

My gut -
if it is on

- get as much as we can if they don't give up
- wait for them to stuff it up
- buy it back even cheaper in a couple of years.


have a great day

Pinto

have a great day

Pinto