FLX - Felix Resources

GumbyLearner said:

Now that's a decent and rewarding dividend! Considering the price of the share. That seems to be a good yield

Click to expand...

If that were the whole story GumbyLearner, unfortunately the two 50c dividends, SACCS and final $16.95 payment make up the cash for the whole company, per share ($18). Most now want between $24 and $27 based on the fact that coal sales should treble, and there may be some swords crossed and blood drawn in the months ahead.

BHP Billiton is seen as the one and only white night and their mail boxes are said to be jammed with pressures from many sources to make a cash and shares bid.

noirua said:

Hi awg, If you go to the Felix website you will see that the Felix final dividend is paid in late October - irrespective of the bid situation. At about that time a further 50c dividend will be paid separately - respective of the bid situation and a further 50c dividend in December also respective of the bid situation. The final payment of $16.95 will also be paid separately in December.

Click to expand...

I'm not so sure about that noirua. From the annoucement about the takeover:

- the payment of dividends totaling A$1.00 per share, funded primarily from Felix‟s cash reserves;
- as part of the A$1.00 per share in total dividends, Felix is today declaring a fully franked dividend of A$0.50 per share to be paid to shareholders in respect of the year ended 30 June 2009. This dividend will be paid on 30 October 2009 with a record date of 15 October 2009, and;
- The record date for the second dividend of A$0.50 will be determined and announced to the market closer to completion.

Click to expand...

Says to me there will only be 2 50c d/e paid.

Just to get matters straight. The Felix Annual results are out on 26th August and the company has unusually announced a 50c fully franked dividend before the results, to be paid at the end of October, as it has been in the last four years.
@@@@@@@@@@@@@

The takeover bid by Yanzhou Coal is worth $18 per share. This is made up of $16.95 to be paid separately in December 2009. A further $1.00 dividend to be paid fully franked (Felix hope it will be fully franked), and this will be paid in two parts, and will depend on Aussie regulatory approval. One payment of 50c in late October or maybe later and the other 50c at the time the main payment of $16.95 is made, but separate.
One share in SACCS will be given for each share held in Felix Resources provide an ASX quote is obtained by December (Felix have given $10 million to SACCS, or will be.)

@@@@@@@@@@@@@

The gold royalties in Sumatre and iron ore royalties in Hawks Nest are not in included with SACCS, and that is as well as ADC in Felix's agreement with Ausmelt and the remainder of S.A.S.E. This is due to an advanced class A action being brought by Krakatau Steel agains Felix and possible class A action over the gold royalties.

That's it, unless a counter bid is made. Or Yanzhou vary the bid in the future.

There are already many posts about FLX dividends and offer evaluation - so I'd like to say a few words about :

1. TECHNICALS:
Most indicators show that the mid/long UP trend is getting stronger - especially divergences and those derived from price moving averages.
2. FUNDAMENTALS:
Current market cap: ~ $3.4b
Good, low debt/asset ratio (as on Jun08): ~ 17%
Fairly low book value (as on Jun08): ~ $2.8 (thus company equity is much lower ~ $544m than its market cap)
ROE (as on Jun08): ~ 18.7 and growing strongly in past years

So considering Wed-Fri sell off and price dips it might be worth watching this stock in a recently declining All Ords environment - so those keen to buy this stock might have a good 'price dip' opportunity now / in coming days.

BHP Billiton is seen as the one and only white night and their mail boxes are said to be jammed with pressures from many sources to make a cash and shares bid.[/QUOTE]

Enlighten us Noirua, O wise person!! Do you have a spy inside BHP's letter box?
Where does this suggestion come from? Iwould certainly welcome a bid from them, at the right price, of course !!
Are you just trying to talk up the bid price, or do you have substantiated evidence for the $24--$27 suggestion?
I'll buy you a Tinnie if you are proved right !!

noirua said:

The Felix Annual results are out on Wednesday 26th August and the company has unusually announced a $1.00 fully franked dividend before the results, to be paid on 30th October to those registered on the books at the close of business on 9th October 2009.
@@@@@@@@@@@@@

The takeover bid by Yanzhou Coal is worth $17.50 per share. This is made up of $16.95 to be paid separately in December 2009. A further 50c dividend to be paid fully franked (Felix hope it will be fully franked), and this will be paid also in December, and will depend on Aussie regulatory approval.
One share in SACCS will be given for each share held in Felix Resources provided an ASX quote is obtained by December (Felix have given $10 million to SACCS, or will be.)

Click to expand...

The following is updated to Felix Resources announcement yesterday of the proposals leading to an eventual bid by Yanzhou Coal, subject to Aussie and Chinese approval.

Quillan said:

BHP Billiton is seen as the one and only white night and their mail boxes are said to be jammed with pressures from many sources to make a cash and shares bid.

Click to expand...

With summer coming on "white night" and BHP Billiton moving hopefully for our summer event "Nuit Blanche".

Felix Resources Annual results should be out sometime tomorrow morning and will give a pointer to Felix Resources likely profits going forward on a per tonne profit basis.

This years sales reached 4.71 million tonnes and output should treble in year ending June 2013 to around 13mtpa to 16mtpa in the years following.

Quillan said:

BHP Billiton is seen as the one and only white night and their mail boxes are said to be jammed with pressures from many sources to make a cash and shares bid.

Click to expand...

Here are the headlines I see if BHP rides in as a white knight for FLX...

Day 1 - Take that China! BHP outbids Yanzhou for Felix
1 week later - BHP executives arrested in China
3 weeks later - Iron ore talks melt down: China will build houses using bamboo
1 month later - Is K Rudd's Chinese good enough? 10 things to say to mend the Sino-Aussie relationship
1 month + 1 day later - Australia PM detented by Chinese officials
6 weeks later - China declares all out war on Australia
7 weeks later - Australia surrenders after US refused to send out reinforcements due to lack of funds
8 weeks later - All Aussie-China mining operations are now state owned

noirua said:

Just to get matters straight. The Felix Annual results are out on 26th August and the company has unusually announced a 50c fully franked dividend before the results, to be paid at the end of October, as it has been in the last four years.
@@@@@@@@@@@@@

The takeover bid by Yanzhou Coal is worth $18 per share. This is made up of $16.95 to be paid separately in December 2009. A further $1.00 dividend to be paid fully franked (Felix hope it will be fully franked), and this will be paid in two parts, and will depend on Aussie regulatory approval. One payment of 50c in late October or maybe later and the other 50c at the time the main payment of $16.95 is made, but separate.
One share in SACCS will be given for each share held in Felix Resources provide an ASX quote is obtained by December (Felix have given $10 million to SACCS, or will be.)

@@@@@@@@@@@@@

The gold royalties in Sumatre and iron ore royalties in Hawks Nest are not in included with SACCS, and that is as well as ADC in Felix's agreement with Ausmelt and the remainder of S.A.S.E. This is due to an advanced class A action being brought by Krakatau Steel agains Felix and possible class A action over the gold royalties.

That's it, unless a counter bid is made. Or Yanzhou vary the bid in the future.

Click to expand...

I feel obliged to clarify further.

I rang Felix just now.

I spoke to Brian Flannery

There is ONLY 2 Dividends payable under any circs, NOT 3

awg said:

I feel obliged to clarify further.

I rang Felix just now.

I spoke to Brian Flannery

There is ONLY 2 Dividends payable under any circs, NOT 3

Click to expand...

Hi awg, If you look at post #967 on 24th August, you will see a correction was made in line with the Felix Resources announcement. This clarifies that there will be two dividends and not three if the bid reaches the final stages in favour of Yanzhou Coal.

“We view the acquisition positive to Yanzhou, as the company puts excess cash to use,” Credit Suisse Group analysts Trina Chen, Kevin You and Ada Dai said in a report today. “We estimate the proposed acquisition to boost earnings by 14 percent for 2010 earnings, and 37 percent by 2011 earnings.”

Yanzhou climbs 25% on the terms of the offer, and B.F says the deal is fairly priced. Can any Board of Directors claim they have negotiated a fair deal for its shareholders, when Credit Suisse says it will enhance Earnings for Yanzhou, in 2 years by 37%?
The Yanzhou share price says emphatically "no" !!

Presumably if a new Offer was pitched at $24, it would still increase earnings by about 25%?

I repeat, if B.F and his fellow Director/Shareholders were only worth say $5m a piece, they would have thrown the offer out, and either waited for a fair offer, or continued to build the wealth of the Company as they have already done so successfully.

But no. They are already fabulously wealthy, and we don't know the personal Directors' remuneration packages which go with the acceptance. Surely the ASX should make this information part of any takeover proposal ?

It is obviously much cheaper for Yanzhou to pay these packages out of future earnings, than to fork out an extra $1.2 billion to bring the offer up to $24 a share.

Noirua reckons the BHP Postbag is full of letters exhorting them to bid. Would earnings increases of 25% in 2 years not be tempting?

And what of the Federal Government? They may say Felix assets are not pivotal, since they all go to export, but surely it is better to keep the assets in Australian shareholders ownership--plus a few Poms !!-- so that the entire value of the mining exercise says in the country?

I will reinvest the monies in BHP if I am forced to take Yanzhou's 18 pieces of silver.

I believe in your Country, but not in mine, I am sad to admit.

Does your Government really want to preside over the rape of your assets, until you become little more than a distant dependent province of China?

For this reason alone it should be suggesting to BHP what is paramount in the interests of the country, and provided the deal makes sense to BHP, it is surely likely to go ahead?

Don't take a leaf out of the British book under Tony Blair and Gordon Brown !!
One of their first actions when they came to power 12 years ago was to sell off the Gold Reserves held at the Bank of England, at around $300 an ounce.
America did much the same. They are not even prepared to allow an audit of the gold "supposedly" held at Fort Knox. Probably because it no longer exists.

Now Britain's economy is in worse shape than several Eastern bloc countries, with debts approaching 100% of GDP.

Every child born in Britain inherits a debt of £20,000.

That's what happens with imprudent management of the Country's finances, and when you sell off the Family Silver on the cheap.You have been warned.

You remain a very wealthy Nation.

About all we have left is the Ashes !! :

You are welcome to submit my thoughts to your Newspapers. We might start a huge tidal wave of objections to foreigners' determination to steal your assets on the cheap.
Natural resources are the seedbed of the future for your children.
China recognises this, so apparently does Credit Suisse, but not B.F., whose childrens' future is assured--assuming he has some.

Hi Quillan, I'm sure all the shareholders of Felix, including the directors (on the quiet) are cheering you from the rafters, the Felix directors hanging from the rafters - by their hands of course.
My comments about BHP were not meant to be a literal letter box, more a reaction from an interview with a BHP director shortly after the bid and an article on Bloomberg that discussed this and opinions from Macquarie on their valuation of $24 - $25. I did send a letter and email to BHP and my cousin did also, and some from bulletin boards on Felix in Australia, Canada, US, Hong Kong, Germany and UK said or told me they did.

There are still shareholders in the United States, Germany, Eire and UK (UK once held over 50% of Felix stock, quoting MD Mr Neill Arthur in 2001) and at least one in Canada (my cousin). The previous MD Mr Jon Parker did say that Felix shareholders still held over 20% of the stock before the buyback 9.3c, 93c after consolidation, in 2004).

Felix's Annual Results will be out sometime on Monday so further comment on valuations is probably best left to then.

Felix Resources directors may have a particular reason for wanting out of Felix Resources shares and that would be the reason for wanting and recommending a bid from Yanzhou Coal. This bid seems both complex and unacceptable.
Where are the directors really coming from on this bid and the long term courting of a bidder?
Are the directors hiding something? That it seems in an underlying factor on this recommendation.

What are Felix Directors, former directors and managers, interests directly in Felix Resources and most importantly indirectly:

MD Mr Brian Flannery owns Ilwella Pty which has a 14.99% stake in Felix Resources. He also has an interest in Coalroc Contractors, operators of the Ashton Mine that are also paid access agreements. He is also paid access to the Minerva mine by a loan given by Felix Resources.

Director Mr Hans Mende controls AMCI's 19.14% shareholding in Felix Resources and he has a personal interest in AMCI. Mr Mende has an additional personal stake in Felix.

Chairman Mr Travers Duncan owns Gaffwick Pty which has a 15.24% interest in Felix Resources.

Former company CFO Mr David Knappick (resigned 31/1/2008) owns partly and controls a 7.41% stake in Felix Resources by Fibora Ltd. He also has a personal stake in Coalroc Contactors.

Former Manager Mr Joseph Butta (resigned 31/1/2008) owns a 4.94% holding in Felix Resources through Remold Holdings (formerly Greenworth). He also has a personal interest in Coalroc Contractors.

Former Directors Mr I McCauley and Mr J Rawlins own Rawmac Pastoral that has access licence fees to the Yarrabee Mine.

Former Director Mr J Rawlins owns Aedion Limited that supplies accomodation to employees at the Yarrabee mine.

There is also a holding by Leopold Station of 4.94% that may have links directly or indirectly with Remold Holdings.

Yunega Mining Services was once 50% owned by Coalroc Contractor who reduced their interest to nil. They undertake work at the Ashton Mine. Who owns Yunega is rather obscure.

Felix Resources Annual Report for the year ending 30th June 2009: http://www.asx.com.au/asxpdf/20090831/pdf/31kf0blvklv7gg.pdf

That is a good result. Latest profit of 136.2cps makes current price the same as any other slightly undervalued stock on earnings with a P/E of 12.67x .. And this is during a global recession. No premium on the future really where Felix will be shipping millions more tonnes . Disgusting really Australians are selling out for so cheaply.

As a point of comparison, Centennial is trading at $3.51 or 18x last years net profit...

Whitehaven is trading at 17.64x FY09 earnings

Directors are very much selling the company short..

Felix Resources Annual Presentation of 2009 results and future forecasts - 'or perhaps a "For Sale" advertisement': http://www.asx.com.au/asxpdf/20090831/pdf/31kf22myrf1t28.pdf
Download 5.60MB

noirua said:

Felix Resources Annual Presentation of 2009 results and future forecasts - 'or perhaps a "For Sale" advertisement': http://www.asx.com.au/asxpdf/20090831/pdf/31kf22myrf1t28.pdf
Download 5.60MB

Click to expand...

Hi yeah thats true, but not counter bid as yet :

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 51.8 134.5 56.1 109.8
DPS 53.0 33.5 22.9 41.2

thx

MS

View of Felix Resources 2009 results and takeover situation: http://www.thebull.com.au/articles_detail.php?id=5684

michael_selway said:

Hi yeah thats true, but not counter bid as yet : MS

Click to expand...

We may have to wait for the approval of Aussie regulators for Yanzhou's bid for Felix before any counter-bidders show their hand. Expected decision in the next 5 weeks.