question for amex, page-2

Unfortunately Susann I was out of the office and missed all the fun. By that I mean I would have been buying up if given the chance. This is the second of the two announcements I have been anticipating. Obviously the market is short on information. The announcement is expected and simply means that TXT does not want a TFS arm that contained poorly performing divisions. TZL has been well prepared and will now bid for the bulk of TFS. How will this work?

Firstly, you can bet your bottom dollar that TXT has plenty of interest. Secondly, they only want to rid themselves of the dodgy divisions. As an example they did not re-open the Louisiana plant that was a basket case before the hurricane. Thirdly, TZL is not going to be interested in traditional fastenings. Fourthly, TXT is very definitely interested in Intevia and want a big piece of this new technology.

So, to my hypothesis. TZL takes all of TFS (for which they probably already have promises of full funding from the banks as part of the NASDAQ float. That is they will float a joint TZL/TFS entity. Since they will not want the nuts and bolts these divisions will be sold off at the same time to any number of willing buyers who need them for existing contracts throughout the US (lots of just in time manufacturers). The residue will be the basis of the Intevia technology, high value TFS components needed to handle Intevia manufacture/marketing and the various design companies and smart materials companies that TZL has and will acquire.

The bottom line is that TZL has a current market cap of ~$75M, too small for NASDAQ. This way the combined entity will be worth over $1B and will float seamlessly. The result for TZL is a golden future where the current sp is history. There is no way they will float without TZL shares being worth a net 4-5x current value so I will bet (no actually I have already and heavily) that within 8-10 months we will see TZL over $2. My only concern is that since there is a major move to the US, we will be delisted in time from the ASX and so will have to then buy into the NASDAQ entity to really profit from what is a magnificicent new technology with far reaching applications. I'll be buying on the NASDAQ even at $2. When the local market finally tweaks to this gold mine expect to see a discovery-led correction. Hope you are all set (all 20 or so of you who know what is happening that is!).