ZFX - Zinifex Limited

[legs]

And what will happen to those excellent ZFX dividends I wonder! The only reason I was hanging on to them really!

ZFX CEO said great dividends will continue to be handed out if at all possible. He remains CEO of new company.

 

[Nyden]

ZFX CEO said great dividends will continue to be handed out if at all possible. He remains CEO of new company.

Yet another reason I don't find this merger beneficial to OXR :
Commodity companies need to be more prudent with their earnings; investing back into the company / further developments, especially during these uncertain times. Squandering them back to shareholders may help the SP in the short-term, but not the long

 

[legs]

Yet another reason I don't find this merger beneficial to OXR :
Commodity companies need to be more prudent with their earnings; investing back into the company / further developments, especially during these uncertain times. Squandering them back to shareholders may help the SP in the short-term, but not the long

However, OXR CEO Owen Hegarty is on the new board and will continue pushing his extremely aggressive expansion plans as he has done with OXR to bring it into a leading mid cap producer, he stated this at the conference yesterday morning. Did you all listen? It's here:

http://www.thomson-webcast.net/au/d...c4&portal_id=214ccbe7ecf926e61db7eb617afc67cf

 

[jeffTH]

ZFX CEO said great dividends will continue to be handed out if at all possible. He remains CEO of new company.

One of my main concerns also. last 4 dividends OXR = 3,5,4,4 cents, ZFX 70,70,70,35 cents. Even if you took average of both companies it results in huge discount for ZFX shareholders. I don't see Andrew Mitchelmore being able to make much difference as CEO, he's only been there 5 minutes and dividend policy is board decision!

Furthermore, ZFX will move in relation to OXR sp rather than zinc price as previously. I am hoping for an outsider to come in and blow OXR away....

 

[Nyden]

Thank you.
Of course, I dont' wait precisius advices or others from you.

But, what will happen, if I don't do anything?

And, I tried to understand the method of the merger. So, the 12.68 AUD offer was valid at a moment....the price will be always changed, because OXR share prices also chaging...am I right?

So, f.e. if OXR share price will up tomorrow, ZFX share price will follow it. (?)


One more question: I don't know what "Q's" and Lic means...

Hello Uhu, long time no see!

Yes, the price of ZFX is now tied to the price of OXR; they'll fall/rise pretty much identically at the moment. Now, one could argue that a premium has essentially not been offered : Should OXR fall another 5-10%, ZFX may very well end up back at 10 & below again ... which it may not have if not for this merger.

Well, if you don't do anything; my understanding is that your shares will automatically be replaced with OXR shares at the appropriate time; neither company will exist anymore, so there will be no way to keep holding only OXR or ZFX.

Well, your broker may be telling you that there's virtually no chance of a premium being made; & the market seems to feel that way as well (as reflected by ZFX's shareprice); so, I guess there is no logical reason to hold ZFX at this point ... unless you believe they may find something huge in the next few months! As, once again, ZFX is now tied to the SP of OXR, so it doesn't really matter which of the 2 you own, and since you already own both ...

- However, it usually is better to own the prey, over the predatory ... in this case, ZFX; always the slim chance of a third party


I'm sure many longterm ZFX holders are very disappointed by this, as they'll now have their losses locked in ... I know I regret selling a while back much closer to 10 : Could've saved near on 20%! Oh well ... at least I had the peace of mind over that period of time :


Now, could anyone answer as to what the tax implications are of this? Does this count as a disposal / sale of shares? I would think so, in which case a Capital Gain / Loss would be realised, yes?


Stance; I currently don't hold either of them, but - I will pickup a parcel or 2 when the new company is born, providing things look good by then

Edit;
It still doesn't look as if the market is all that excited about this ... the market is not that far down today, yet these 2 are in the red by nearly 5.3%

 

[Prospector]

Now, could anyone answer as to what the tax implications are of this? Does this count as a disposal / sale of shares? I would think so, in which case a Capital Gain / Loss would be realised, yes?

I think that ZFX needs to obtain a special dispensation for this? And Jeff, sounds like those dividends are going to disappear too.

Quite strange really, a few weeks ago i was going to enter into shares that might be taken over - LHG and OXR were the ones I was looking at, but decided on LHG, which has grown nicely since; seems like I am going to end up with both now.

 

[Nicks]

And what will happen to those excellent ZFX dividends I wonder! The only reason I was hanging on to them really!

Yep pretty disappointed here too. Wasnt really all that worried about the SP, was just happy with the great dividends.

 

[Nyden]

:bekloppt: Goodbye to the "premium"?

Sure looks as if ZFX is going to give back any profit made yesterday ...

 

[3MT]

this follows an upgrade from 3/4 brokers for both stocks plus fitch ratings stating they will increase ZFX's credit rating as a result of the merger.

goes to show end of the day the hedge funds own the stock market.

 

[uhu]

Hello Nyden,

I will answer to you. but now
1. I have to be hurry because I have to work in one hour
2. I am angry...what was happened? Why did OXR shareholders make this sell-off? If they have wanted to do this, why did they wait? (They could do this sell-off yesterday also.)


I am don't understand this aussie logic...

 

[PBH]

If, as a Zinifex holder, you feel like you've copped the short end of the stick with regards to the merger, dont worry; you're not alone: according to 'FN Arena', Merrill Lynch, Macquarie and JP Morgan share the same sentiments..

Any predictions on the outcome of the shareholder vote?

 

[shinobi346]

As a ZFX holder who bought near the recent high (16+ mark) I'm happy to hear about this merger. Its stopped the sp from sliding further and in the long term, it'll form one of the biggest mining companies in Australia. When I bought ZFX I was expecting them to buy/merge with another company soon. It being OXR does not disappoint me. As for dividends... well Century's not going to last forever so we knew the payout had to drop sometime and it already halved even before this merger was announced so it's started already...

 

[uhu]

As a ZFX holder who bought near the recent high (16+ mark) I'm happy to hear about this merger. Its stopped the sp from sliding further and in the long term, it'll form one of the biggest mining companies in Australia. When I bought ZFX I was expecting them to buy/merge with another company soon. It being OXR does not disappoint me. As for dividends... well Century's not going to last forever so we knew the payout had to drop sometime and it already halved even before this merger was announced so it's started already...

Hi shinobi,

Well, when I started trading in australian market at last summer, I chose ZFX and OXR, because:
- both companies had (have) organic growth and very good menegement
- and, the M&A story

I hoped ZFX would buy OXR.....well, it's the same for me who buy the other, but I am really disappointed now. At last summer the rate between OXR's and ZFX's share prices was about 5:1. And now, 3,2:1.

So, why Zinifex's bosses think this is the correct rate/price? Maybe it would have better wait. For example, OXR's share prices was below 3 AUD one months ago....the rate was 3,5-4: 1.

And, the yetarday large drop... -9 and -10%. Why was it?
a) Oxiana shareholders don't trust in Zinifex's projects?
b) Zinifex shareholders would like to buy another stock?

 

[legs]

Lets clear something up here:
There is no predator, no takeover, no target.
Its a MERGER where Zinifex will end up with Oxiana, more than Oxiana with Zinifex. Look who's the new CEO, look who has the most capital now, watch what they'll call it. They are simply using OXR share price (NOT SHARES) as a valuation to determine how the merged SP of the new company will take value.

 

[Nyden]

Lets clear something up here:
There is no predator, no takeover, no target.
Its a MERGER where Zinifex will end up with Oxiana, more than Oxiana with Zinifex. Look who's the new CEO, look who has the most capital now, watch what they'll call it. They are simply using OXR share price (NOT SHARES) as a valuation to determine how the merged SP of the new company will take value.

Ahem,

(Reuters) - Australian miner Oxiana Ltd (OXR.AX: Quote, Profile, Research) launched an agreed A$6.1 billion ($5.7 billion) takeover offer for Zinifex Ltd (ZFX.AX: Quote, Profile, Research) on Monday, looking to diversify to benefit from booming global minerals demand.

Oxiana is offering 3.1931 shares for every Zinifex share, valuing the zinc and lead miner at $6.2 billion.

The most likely rivals would be Vale of Brazil and Xstrata of Europe, but both are deep in possible merger talks: the big Anglo American group of South Africa is grappling with the impact of mining problems, power shortages and safety issues in its heartland operations, while a couple of other players from Canada and the US would be constrained by the credit crunch from raising the $6 billion cash plus for any bid.

Don't know what it is exactly you're saying legs? But this is a takeover, it's just a friendly one ... but, if a third party were to come along - the directors of ZFX would have a duty to its shareholders to take a better offer - however unlikely that is.

 

[legs]

Ahem,









Don't know what it is exactly you're saying legs? But this is a takeover, it's just a friendly one ... but, if a third party were to come along - the directors of ZFX would have a duty to its shareholders to take a better offer - however unlikely that is.

This is what annoys me...

It is not a takeover, and alot of you people believe what LIES the reports are saying.

1st (AND KILLER POINT): Where does a takeover ever happen where the targets CEO stays on as CEO and most of the board members stay as well...
lol...Seriously...can't you see that makes it a merger??

2nd: Oxiana isn't offering 3.1931 of its shares...this is what the merged company will offer..3.1931 of OXR's value at a certain time. OXR will not exist post merger, it will be a new company with a new name... UNLIKE A TAKEOVER...

3rd: The third quote of yours says nothing relevent to this MERGER

4th: It might bring out a third party to make a hostile bid for ZFX or even a friendly one. Nobody denies that.

 

[Ashsaege]

Nyden makes some good points in regards to bad timing for the merger/takeover.
ZFX sp's is now tied to OXR's, and zinc prices will effect the OX - i agree.

Tho the management are onto it... ZFX AGM takeover - diversing into nickel. And they are looking into Copper too. The Ox are also agressive in regards to growth.

Also Michelmore seems quite optimistic in regards to zinc being in strong demand for the year... he might just be trying to boost shareholder's confidence... or he could be correct.

Weaker shareprice and smaller divies in the short term doesnt bother me. Long term growth is where im at. Tho i wouldnt mind 4 Ox shares per ZFX... make up for the lost!

 

[roland]

Zinifex are re-inventing the company -they have done it before - and that proved the management has the ability to do what it takes. Market sentiment, versus timing aside, a large company like this has an agenda for growth.

Unfortunately the timing of the processes to growing the business is not going to coincide with shareholders expectations of when events and announcements are made.

Since the SP has dropped so much, it was well expected the dividend value would also drop - at $20 we expected $0.70 biannually, now we are at around $10 - $11 - simple maths would show $0.35 is reasonable.

Broker sentiment is way down - Aegis show a 12 month forecast of $10.55 - this is without factoring AGM and the OXR thing.

Personally I am a little confused with with my valuation of Zinifex hldings since I have never studied Oxiana.

I wonder how either OXR or ZFX holders could be upset with the eventaution (is this a word?) of a much larger company, combining the experiences of 2 x excellent management boards.

So far there is little in the way of positive comments here, I for one see some good future benefits from a consolidation of the resources of OXR and ZFX (and AGM) - we are getting close to having it all - Nickel, Zinc, Gold, Silver, Copper, Lead - not to forget that there is still plenty of cash around for more acquisitions.

Let's ride out the storm and see where we wind up

 

[Nyden]

This is what annoys me...

It is not a takeover, and alot of you people believe what LIES the reports are saying.

1st (AND KILLER POINT): Where does a takeover ever happen where the targets CEO stays on as CEO and most of the board members stay as well...
lol...Seriously...can't you see that makes it a merger??

2nd: Oxiana isn't offering 3.1931 of its shares...this is what the merged company will offer..3.1931 of OXR's value at a certain time. OXR will not exist post merger, it will be a new company with a new name... UNLIKE A TAKEOVER...

3rd: The third quote of yours says nothing relevent to this MERGER

4th: It might bring out a third party to make a hostile bid for ZFX or even a friendly one. Nobody denies that.

Obviously OXR is not buying ZFX per se - it is a merger, but; different name, same crap, as it were?

The price ZFX now follows is OXR; making OXR the metaphorical predator here, slim chance for a third party.

Yes, it would make no sense to give shares, only to take them away, & re-issue new ones : But the new company is not yet formed, one cannot say "3.1 shares of a company that currently has no value"

Or will this new company trade under OXR shares, simply with a name change? I haven't read the specifics.

So, to break it down - it's easier to look at this as a takeover, because it's essentially the same principal. Chance for a third party, one share price now tracking another, what difference is there? Aside from the fact that neither is getting 'bought out' :

 

[oldblue]

Despite the apparent friendliness of the two parties, I see a chance of a third party ruining the "party" if either OXR or ZFX is attractive enough to it at current prices.
In particular, I don't think it would take much more sweetening to tempt ZFX shareholders to break the engagement, a lot of whom seem lukewarm towards the merger.