OZL - Oz Minerals

[skc]

Tom Elliot wrote on Eureka Report that he's not punting on this one, on the grounds that he doesn't like the political risks involved. Tom is a guy who made a living out of takeover plays so it's not the most positive sign.

You might need a login to read the article here.
http://www.eurekareport.com.au/iis/...Start=1&Count=20&type=eureka&category=&Click=

Ironman - I had a long last week and got stopped out nice and quick using a tight stop. ~5c loss for me. This is one punt where you must be prepared to lose it all I think. Because the next announcement / trading halt may see it spike up or never trade again.

BTW, that is a picture of storm trooper, not Iron Man.

 

[jackson8]

thanks guys for a excellent thread.

Just got on the OZL story now lol.

IMO - just buy with tight stops. either it goes or your out. Looks good for me to get in at these prices. It depends on how things unfold with the announcements. eg No and straight in to the can or no and limbo time to get out.

Where do I get options on this Commsec?

That would be the safe way.

a tight stop isnt going to help you if it goes into a trading halt and never comes out again

with commsec have you opened up an options account with them

here is an interesting article
http://www.tradingmarkets.com/.site/news/Stock%20News/2191476/

 

[Pager]

Down about 20% this morning

Glad i went for the options, had i bought 6000 i would be down over $1000, the options I'm down $100, if the banks say yes (due the end of this week) and the FIRB approve the deal which is due in March then there is still hope for a bounce up to or near the offer price.

Don'T look good though if the SP is any indication

 

[AbundantIncome]

Down about 20% this morning

Glad i went for the options, had i bought 6000 i would be down over $1000, the options I'm down $100, if the banks say yes (due the end of this week) and the FIRB approve the deal which is due in March then there is still hope for a bounce up to or near the offer price.

Don'T look good though if the SP is any indication

I got a pretty tight stop loss, so glad I did. Still a few hundred bucks loss though. But at least I can pick myself up and restart. Cannot imagine, the other way around... get stuck and cannot do anything with it any longer ... phewwwwwwwwwwww

 

[Sean K]

Any hints as to why it's trading at such a discount to the offer of 82c?

Punters assuming that its not going to go through?

If not, surely it still puts an approximate price on the company?

Worth a punt maybe?

 

[gfresh]

Going on the share price movement today, and for it to dip that far below it's halt price of 55c.. would seem it's not too likely. I'm sure some have a pretty good idea which way it's heading, but that's not us regular plebs who can only go on price and rumours.

I'm out to preserve at least something - too much risk, I don't trust banks to do anything other than which benefits them the most. May possibly buy in next week if things look different - I'm sure it will still be at a discount with current sentiment, even if the financiers agree for an extension.

 

[AbundantIncome]

I rather trade on technical ... fundamental is too volatile and too extreme to my liking .... try to get away from rumours etc like this ... just not worth it ... like a gamble then ...

If not passed by the government and banks assistance, you could lose the lot. Government, how well they receive foreign ownership. Logic would dictate that they would go with letting the assets owned by local even though they are separated. Banks, they are there to make monies. Let it pass through, they might get some of their dollars back.

The worst ever merger in the world I think !!! Whoever thinks of this type of arrangement must be very poor in spirit indeed ! They could have seen the downfall from such arrangement ? I am sure they would have been much better off before the merger ...





So, two risks at play ...

Wait and see ...

Going on the share price movement today, and for it to dip that far below it's halt price of 55c.. would seem it's not too likely. I'm sure some have a pretty good idea which way it's heading, but that's not us regular plebs who can only go on price and rumours.

I'm out to preserve at least something - too much risk, I don't trust banks to do anything other than which benefits them the most. May possibly buy in next week if things look different - I'm sure it will still be at a discount with current sentiment, even if the financiers agree for an extension.

 

[skc]

Any hints as to why it's trading at such a discount to the offer of 82c?

Punters assuming that its not going to go through?

If not, surely it still puts an approximate price on the company?

Worth a punt maybe?

Would have been a good punt at ~40c. You get better than 50-50 odds that way. The concern is that foreign banks will pull the plug as they want their money back nice and quick. Hard to imagine but anything goes in the world of GFC. Can't Minmetal simply extend to OZL a bridging loan or something to tie them over the next few months? That way the only roadblock left is the FIRB approval which is not a small risk in itself.

 

[Bolivia]

Whats actually changed from a few days ago?

IMO there is no downside, for the banks, in extending the loan facility. Interest can still be paid in the extension period by Oz Minerals. And even if the deal falls through, the banks would still have to embark on a fire sale of assets, just three months later. Would the price they get 3 months from now be that different. The assets that Oz minerals have would, even in a fire sale, well and truly cover the banks debt. Arguably there might even be residual money left for shareholders.

So why the big change in sentiment today?

There has been a few analysts writing negative reports re the deal. But what evidence is that based on? Its just pure hypotheticals.

Surely with the deal on the table, and Min metals having good relationships with at least 2 of Oz minerals syndicate banks, the chance of getting a bank extension would be good.

WRT the FIRB - Oz minerals assets are not nationally strategic. If the government rejects the deal, Australia will lose enormous amounts of foreign investment. Just what our economy will need over the next few years.

So, what to do? I agree that buying now is a risk but just how much? At 40c you have 100% upside and 100% downside. Has it really boiled down to just a coin flip?

 

[nunthewiser]

Any hints as to why it's trading at such a discount to the offer of 82c?

Punters assuming that its not going to go through?

If not, surely it still puts an approximate price on the company?

Worth a punt maybe?

kennas ...... from chatroom


[milothedog] 10:17 am: OZ Minerals Ltd (ASX:OZL) looks increasingly unlikely to meet its deadline to
refinance about A$1.2 billion (US$771 million) in debt by Friday, which could see the ailing miner placed into
administration next week, analysts say.
******[milothedog] 10:17 am: http://www.tradingmarkets.com/.site/news/Stock News/2191476/


also thinks there is some MAJOR doubt EVEN if refinancing deadline extention that the punters coming to grips with the fact that the feds may NOT let a full chinese takeover go through because of the ramifications it will produce

im not touchin it

one of those fire breathing acts m8

definately a quid to be made maybe but not for this chook

 

[Sean K]

Probably was a quick trade option but wouldn't want to get caught without a chair if it goes into a halt.


1055 [Dow Jones] OZ Minerals (OZL.AU) down 12.5 cents, or 21%, at 46 cents, hits record low of 40 cents amid concern that it may be unable to meet deadline to refinance A$1.2 billion of debt by Friday. If that happens, Minmetals takeover offer could fall over, resulting in OZL being placed in administration. OZL not immediately available to comment. (DWR)

1110 [Dow Jones] OZ Minerals' (OZL.AU) share price fall this morning could be explained by a squaring of long positions by margin lenders, as a few have decided not to support such positions for their retail customers, according to a market participant who didn't want to be named. So share fall is more technical than due to any renewed speculation on OZ's ability - or not - to arrange debt extension. Last down 21% or 12.5 Australian cents to 46 Australian cents. (ILM)

 

[Taltan]

0.495 looks like money for jam. Imagine the employee/shareholder backlash if the govt refused the bid? Even this govt would surely not allow that whilst they are trying to pump $42bn in. Only other risk is the banks but the bid looks generous enough to surely cover that, also whats to stop BHP stepping in at less than 82c? Having said all that I'm holding off cause I don't have the inside information. As per usual if it looks to good to be true it probably is

 

[nunthewiser]

0.495 looks like money for jam. Imagine the employee/shareholder backlash if the govt refused the bid? Even this govt would surely not allow that whilst they are trying to pump $42bn in. Only other risk is the banks but the bid looks generous enough to surely cover that, also whats to stop BHP stepping in at less than 82c? Having said all that I'm holding off cause I don't have the inside information. As per usual if it looks to good to be true it probably is

whats to stop the predators offering the bankers individual bids for individual assets to cover the debt ...... knows what i,d be doing personally , why buy the whole company debt included when one may be able to buy the individual assets one wants at the debt cost instead

intresting times for this co .. even if the banks extend deadlines , it dont mean the feds will let ANY full foreighn takeovers through

 

[Iron Man]

IMHO - its bankers first and women and children last. It makes more sense to close it down and sell the parts to the highest bidders. The chinese while being nice to come forward have probably given the bankers a better reason to cash in as they have a ready made buyer. Shareholders lose but bankers win "Its good to be the bank " and remember the golden rule -those with the gold make the rules.

 

[TheAbyss]

IMHO - its bankers first and women and children last. It makes more sense to close it down and sell the parts to the highest bidders. The chinese while being nice to come forward have probably given the bankers a better reason to cash in as they have a ready made buyer. Shareholders lose but bankers win "Its good to be the bank " and remember the golden rule -those with the gold make the rules.

Are you saying that you believe the banks want to foreclose on OZ to get their money and based on this they will deny an extension to OZ in order for them to have title on the assets and sell them to Minmetals rather than grant a few months and be paid in full? Surely it would be better to delay a few months rather than a drawn out administation process and the risk of a fire sale?

Beyond belief to me if that was your intent.

Surely an operational mine has more value than a hole in the ground on care and maintenance?

Notwithstanding the banks are assured of receiving payment in full including all interests and charges if they grant an extension rather than foreclose. If nothing else they will save a few months by an amicable solution and riosk receiving a low ball bid in a firesale. That isnt to say teh Minmetals bid isnt low ball either but that is another story.

 

[dandyjac]

THEABYSS : I agree it is in the banks interest to let the deal that OZ have put together go through, if they put the company into receivership it would take just as long for a sale to go through by selling the individual assets not to mention if they wanted to stitch Oz up they could have done it over the past 3 months

 

[noco]

With the Prominent Hill Operations coming on line and having delivered its first copper/gold concenrate, with first revenue to begin to accrue at the end of Q1 2009 (info from ComSec) surely the bank would take this into consideration and show some compassion, particularly for us share holders.

The Rudd Government has been very conspicuous by their silence.

How many will be out of work should OZ close their doors?

 

[dmagnus]

Im betting on it going thru

Administration is the last resort, it is long and drawn out and if there is another option it will get taken.

That is an opinion based on experience.

That said, there are international banks in the syndicate, who knows if they give fk!

 

[rnguyen]

OZ Minerals, has won an extension on a debt repayment due on Friday to March 31.

http://business.theage.com.au/business/oz-minerals-secures-debt-extension-20090227-8jl2.html

Seat & wait I guess!

 

[sammy84]

Not entirely the result I was hoping for. I don't understand a month extension for a takeover which is due to be completed till may/june. Is this a protection mechanism by the banks in case the takeover doesn't get approval?