hi everyone.
good discussion. we are not missing Goblin at all.
Firstly Partner1 you absolute toss.er. Yeah i got on early cos of your tip, 2005 to be precise. thanks for that. i said i would apologize if the takeover came when you said it would which was btw xmas and new year and u were proven to be WRONG. This news that you have is leaking out so badly that no one is buying at all.
What ever happens from here you have called nothing. everyone knows that zfx and ox have been talked about for a year or more as a target.
ZFX is not likely to become a target until it divests its smelters and improves mine life. Greg Gailey has acknowledged that the only way to improve mine life quickly enough for the market is by aquisition. so the question is who? they are looking to diversify metals as well and also locations. IF GG wants a good price for his shares then he doesnt want to be taken over for $25. if zfx aquired OXR for $6 billion and thats a 50% premium then they would aquire the minelife instantly and be re rated by the analysts at a reasonable pe of say 10-15.
If the TO was funded by $1bill cashh from earnings ie no divvy and $2.4 bill from sale of smelters then they would need to find $3 bill or so which they could use debt for i am sure. you then have a company with mine life and diversification that has $2 bill in 2007 and $500 mill oxr 2006 earnings. less smelter profit of $300 mil.
so $2.2bill approx with good minelife and no smelters.
10-15 pe gives you a $22 - $33 Billion diversified mining house.
allowing for metal price reductions i will give you $18 - $25 billion.
That means with no dilution that you have $37 - $51 share price.
Then add a takeover premium to that.
That would allow Greg Gailey to go out with 2 million shares at $40 plus.
Back to the OX.
Perhaps ox wouldnt take $4.50 for their shares this year. i know i would sell them mine.
MX the reason i say their performance is disappointing is because they hit $3.80 in may 06 when zfx hit 13.50
since then we have seen oxr go to $2.86 and zfx to $16.70 via $19.08
TAS
the smelters must go before anyone will look at zfx that is why i think Partner1's takeover rumour is implausible.
ONce they are gone they are more attractive but what would an aquirer be getting? Loads of cash yes. but not minelife . OXR has the minelife that zfx needs.their recent announcement re another 15 years at golden grove and maybe double the resource at prominent hill gives them that minelife.
Oxr's weaker share price ATM gives them a disadvantage imo.
thats it from me.
please critique my figures or reasoning.
Note: i hold both oxr and zfx so i have no favourites. just calling it the way i would see it logically.
andrewe
OXR
oxiana limited
