over or undervalued

@#$%$#!! - so which is it - under or overvalued?

From the SMH:

'Overvalued' but Midwest deflects bid

Jamie Freed
October 25, 2007
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MIDWEST'S chief executive, Bryan Oliver, has said his company is "probably overvalued" on the basis of its current iron-ore resources, even though it is trying to deflect a hostile bid from its rival, Murchison Metals.

The Midwest board has not recommended that shareholders accept Murchison's scrip offer, since it thinks it has the potential to prove more value in the future.

"On expectation going forward possibly [we're undervalued]," Mr Oliver told media in his first public comments since Murchison lodged its bid two weeks ago. "Relative to the Murchison bid on price it would appear to me we are undervalued."

Under Murchison's offer, Midwest shareholders would own about one-third of the combined group. UBS estimates the two, which have neighbouring iron-ore deposits in the mid-west region of Western Australia, could save up to $400 million of costs through a merger.

Midwest has proven more iron-ore resources than Murchison. But Murchison has more ambitious development plans in concert with its joint venture partner, Mitsubishi of Japan. Murchison's share register is dominated by institutions, while at least one-third of Midwest shares are held by Malaysian interests.

An Ord Minnett analyst, Peter Arden, said Mr Oliver was a strong mining operator, but Murchison had a first-rate management team with more extensive corporate experience. "You've got to be strong on the corporate side," Mr Arden said. "You've got to be able to raise money. You've got to make big deals."

He noted that Mr Oliver was not a member of Midwest's board, which is dominated by representatives of its main shareholders. "He's sort of a hired gun, not perhaps on the complete inside," Mr Arden said. "It is odd. But that's the way Midwest has operated for quite a while."

In a letter to Midwest shareholders last week, Murchison attributed its higher market valuation to its joint venture with Mitsubishi, support from institutional investors and the strength of its management team.

Mr Oliver said his management team had "essentially a conservative approach" since it preferred to deliver on achievable forecasts.

http://www.smh.com.au/news/business/overvalued-but-midwest-deflects-bid/2007/10/24/1192941153451.html