Bbloff, There is always tension between risk and reward, but like you, I can understand the apprehension. History is not on OZL's side with making good aquisitions.
I hope you would agree that the 19.9% in SFR was a good buy. The shares were > $4, OZL waited for them to drop and then purchased. That, to me, shows good discipline and patiance. Also, they have effectively removed other bidders, thus negating a bidding war. Strategically, a good move. This gives me some confidence here.
Carrapateena is interesting. OZL has already stated that they made offers on copper projects and they were rejected. That, to me, says they are not willing to overpay and destroy shareholder value. OZL may be able to pay a little more due to structures in place to manage SA mining activinties (synergies), whereas other companies would need to set up those overheads. This does give OZL a competative advantage. Also, using cash, rather than borrowing money will also make it more attractive for OZL (EQN may have issues here). I have to admit that if Carrapateena does come off, great, if not, that is also fine as OZL will just concnetrate elsewhere.
HT1
OZL Price at posting:
$10.50 Sentiment: LT Buy Disclosure: Held
