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FLX - Felix Resources

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pacestick said:
I cant see the Lehman situation not reducing the possibility of takeover unless buyers were cashed up in their own right
Love to be wrong
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Hi, I haven't checked the cash held situations of Vale, BHP and Rio yet, though I guess they are in good shape.

Xstrata looks a good deal poorer now and look set to dump their bid for Lonmin, and as their shares are down 60% from 12 months highs, a bid for Felix looks doubtful now.

The benchmark thermal coal price fell US$10 last week as some companies turned back to gas.
Hopefully the Aussie$ will fall with the coal price and save the day.

Companies holding lots of US$'s will see a Felix bid costing a lot less now. So, maybe a bid from a number of companies is likely now, even Peabody or AMCI themselves.
 
zaz said:
Buffett has an appropriate quote (as he does for most things!).

We're trying to pick up pennies in front of a steamroller.
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Hm do you think FLX is bullish or bearish at current prices?

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 51.8 208.0 265.4 362.3
DPS 53.0 111.0 118.9 158.5



thx

MS
 
michael_selway said:
Hm do you think FLX is bullish or bearish at current prices?

.....

thx

MS
Click to expand...

I think that Felix is WORTH a lot more than it's currently trading for. Probably between 25 and 35 AUD (even more with the current AUDUSD).

However I expect the SHARE price is almost entirely supported by the possibility of a bid. In the absence of such a bid I'd expect the same as happend to MCC. A drop of 33%. I could easily see a bid producing 33% on the upside.

What do you think?

Cheers, Neil
 
Vale is stacked with cash it raised when it proposed to take over Xstrata.
$13 billion rings a bell. No doubt Noirua will confirm or correct !!!
I still reckon the Xstrata connection with Flannery is important, and the proximity of Ulan to Moolarben may be more significant than we realise. If Xstrata had the financial lines set up to bid for Lonmin, then FLX is comparative chicken feed. Note the reasonable number of 60,000 plus share purchasers of FLX today
 
I try not to read too much into random noise but how did Felix manage to close up 4.2% today and go out near the high for the day!
 
zaz said:
I try not to read too much into random noise but how did Felix manage to close up 4.2% today and go out near the high for the day!
Click to expand...
Interesting, though the types of trades do look fairly ordinary and picking off the fence does seem absent. Press comments have pointed towards Felix being undervalued despite the market turmoil. Maybe some see FLX as a good gamble in otherwise dire markets.

A bid of AU$26 would now cost about US$20.50 against US$24.60 not long ago (exchange rate London fix half hour ago, AU$1.277 to the US$1).
 
The fall in the Aussie dollar must be cushioning the miners a fair bit imo. At around 78c against the USD at present and onlt two months back was 98c. 20% drop must add a little to the bottom line. Superb performance by Felix today.
 
Hi Quillan, Your figure of $13 billion might be right as "Companhia Vale Do Rio Doce" are generating cash at a high rate.
At the half way point for Y/E 2008, Vale had generated $6.4 billion cash and that generation may well be nearer $10 - $12 billion by now. They held about $1.6 billion cash at Y/E 2007, so it looks as if you're spot on. You must have done your homework.
They have liabilities of $6 to $7 billion, as a bit of a guess, to date.

At the market price , afternoon today in the States, Vale stood at $19.80 a share, giving a market cap of around $103 billion. The PE Ratio is 10.0 and yield 2.05%.

Stocks 12 month high was $44.15 and low $19.78.
 
Thank you Noirua. Praise indeed !! But actually I read it somewhere recently. I wouldn't mind taking Vale shares straight. In these times of turmoil and with the Vale price down 50%, I think it would be a good holding over 5 years.
I see China's quarterly figures continue to leap ahead, so they seem set to continue their amazing pace, which must be good for all of Vale's minerals.
With Brazil and much of South America on an upward curve, it certainly seems a good geographic area to invest quite a good proportion of assets. Perhaps we will be appearing on the Vale blog site soon !!
Another tempting FTSE 100 share is KAZ.L, the mining conglomerate in KAZAKSTAN. Don't run a mile !! It's based in London and the President of Kaz owns a chunk of the company. Also the company does a lot of good work in the country. But a PE of 4.75? Has been Pounds 20 recently. It has just missed its copper production figures by a tiny amount due to cold weather and maintenance work, but just look at all the producing assets it has !!
The lost production was minimal when the copper price is riding high and it is#10 in the world in production. In June it was selling at P16. Now it's under 7 Pounds.Check it out. KAZ Not the pound, which of course would hurt me if the offer for FLX was in cash, and I wanted to bring it back to the UK. GBP-AUD has risen from $2.05 to $2.25 in the past few weeks.
My laptop has decided not to print the pound sign today. Could be an omen!!
 
Felix first mentioned a potential takeover on 28th July. It's now 6 weeks later. Does anyone have any insight into what takes so long? Any thoughts on whether the chances are increasing or decreasing?

Macarthur Coal first mentioned that they were in talks with "a 3rd party" on 21st April and it was around 1st July that he press announced Talbot's sale. That makes for about 9 weeks.

Obviously this is a premier asset etc... but with everything going on in markets right now it seems that the chances of a successful transaction are decreasing. That said BHP and Vale are cashed up but there are many awesome opportunities out there aside from Felix at today's prices.

After all a buyer only needs to evaluate the financials (a few days to a week), evaluate their ability to pay (a few days) and then start negotiations. The Moolarben situation only affects a very small portion of the value in Felix so I don't believe that's holding things up.

I'm mostly curious as to what other people's thoughts are.
 
zaz
The board has so much of the shares tied up that a hostile bid would be most unlikely to succeed . The amount of companies who are supposed to have looked at felix would indicate that the first mover has to deal with a counter offer. While the company has significant other assets the unclear situation on the big M is a factor with a number of potential bidders. Therefore they may be waiting the court orders which seem to have disapeared into Dr whos Tardis.
that's my guess
 
There could be problems shortly starting with coke and coking coal. Priced from US$240 to US$300 per tonne for semi-soft to coke. With the US$ rising quickly we could see a sharp tumble to the US$160 - US$200 range for spot.
In Aussies it is helped by the 21% plunge in the currency.

Thermal coal is in shorter supply as everyone with semi-soft coking coal is shipping it instead of thermal, because of the higher price.
Prices up to US$194 for thermal, already retreating quickly, could go under the US$125 per tonne agreement from 1st April last.

The above setting is causing concern as it remains to be seen if the Newcastle Port problems help keep the price stronger than expected. QLD companies shipping out of Gladstone have mainly rail problems and are shipping out as fast as they can.

Felix have longer term agreements to supply coal. This especially applies to the Moolarben future mine.
 
Here's my Penny's worth. We will either read of an agreed bid, or a withdrawal of all interests. There's no point in announcing a bid which doesn't have the approval of the Directors, and possibly of 67% of shareholders, so the negotiations will continue until an agreed price, or share swap is struck.
The good news is that the time taken suggests they are dealing with more than one bidder, unless Moolarben is the sticking point.
According to Flannery the outcome of any alterations in the Law concerning these 2 pieces of land, would probably only affect 5mt I think? of total production.The change in the law was to be a clarification.It seems this is in FLX's favour, since the Government didn't like Xstrata's behaviour over the disputed turf.
If there is only one bidder, then the bidder has the upper hand.
"That's our final offer. You know what will happen to the share price if it is not accepted."
But with 2 bidders, the scenario is very different. Neither wants to lose the prize to the other.
Good to see 2 sizeable trades at the end of today, but hardly surprising to see the price drifting a bit.
One wonders who is buying 100,000 shares at this stage, unless they know something?
Considering the state of the rest of the markets, and the falls in the major mining conglomerates, Felix shareholders have fared well. I'm hanging in there.
Whatever offer may have been made 6 weeks ago, will not now be so generous, unless there are 2 or more really keen to get their hands on these assets.
 
Quillan said:
Good to see 2 sizeable trades at the end of today, but hardly surprising to see the price drifting a bit.
One wonders who is buying 100,000 shares at this stage, unless they know something?
Click to expand...

Hi, I couldn't see these 100,000 trades you talked about. Early on there was a 246,090 T1-51, at $17.69 that took the price down firmly at the start. Recovered to end at $18.25. There were some listed crossings at the end of the day from Wednesday.
 
++++Growth Story of the Year Award - 2008++++

Winner --- Felix Resources
nominees: Gloucester Coal and Aquila Resources

Sponsored by the "Sydney Mining Club".
 
Some more matched trades near the end of the day that look a bit like someones picking up stock gradually.
 
noirua said:
++++Growth Story of the Year Award - 2008++++

Winner --- Felix Resources
nominees: Gloucester Coal and Aquila Resources

Sponsored by the "Sydney Mining Club".
Click to expand...

Hey interesting, do you have any links?

btw do you have AQA?

AQA - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -6.6 -6.0 34.2 48.7
DPS 0.0 0.0 0.0 0.0


thx

MS
 
noirua said:
This link may not work first off, I will try to get it right:
http://www.abnnewswire.net/press/en...lly_Competitive_Australian_Mining_Sector.html
Click to expand...

Yep looks good


2008 National Mining Awards Recognise The Globally Competitive Australian Mining Sector


 
Events over the last few days have increased the chance of news this week:

1. No Short selling -- anyone announcing a deal with scrip is not going to have to deal with arbs shorting their stock
2. No new short selling of FLX, may have seen a short term low in the stock
3. Aussie dollar has probably turned around - foreign buyers are paying more as the AUD strengthens

All together along with the change in sentiment might be enough for one of the procrastinating on lookers to move forward with a deal. It looks like a different land scape to last Wednesday!
 
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