ZFX - Zinifex Limited

[oldblue]

The original announcement said the merger would be voted on in "May/June". I havn't seen any elaboration of this but I think that that timing also got a mention in a recent ORG presentation.

That should have read "OXR", of course!

I'll try to find it again but I'm pretty sure it didn't mention any specific timing. Being an OXR holder but not ZFX, it doesn't really matter to me. ( the precise timing, that is).

 

[oldblue]

That should have read "OXR", of course!

I'll try to find it again but I'm pretty sure it didn't mention any specific timing. Being an OXR holder but not ZFX, it doesn't really matter to me. ( the precise timing, that is).

Yes, only referred to as " May/June ", in the OXR quarterly report for the March quarter, released on 16 April. Can be accessed via the ASX website.

 

[ba229]

With OZR's closing price at $3.34 and an "equals merge" deal for zfx holders to get 3.1931 per share that means ZFX's closing price should have been $10.66.

Why then did it close at $10.09?

Is ZFX undervalued or is OXR overpriced.

As a holder of both I have never seen this as a good deal for the ZFX side of things (personal opinion).

I know it means ZFX will be diversifying into other metals etc but can't I please get some bloody justice out of the shares being offered. Somewhere closer to 4 per ZFX would see me a happier bit of skirt.

 

[Ashsaege]

With OZR's closing price at $3.34 and an "equals merge" deal for zfx holders to get 3.1931 per share that means ZFX's closing price should have been $10.66.

Why then did it close at $10.09?

Is ZFX undervalued or is OXR overpriced.

As a holder of both I have never seen this as a good deal for the ZFX side of things (personal opinion).

I know it means ZFX will be diversifying into other metals etc but can't I please get some bloody justice out of the shares being offered. Somewhere closer to 4 per ZFX would see me a happier bit of skirt.

I am a holder of both as well, but I haven't liked this deal for the OX side... the ox is now tied to zinc and the share price has fallen - tho i know there are many different factors contributing to that too.

I would prefer 4 per ZFX too! Though that could push OXR down to $2.50ish

 

[uhu]

Show is going on...

AGM-ZFX-OXR - and now Xstrata?

http://business.theage.com.au/oxiana-surges-on-takeover-speculation/20080507-2bug.html

Well. in my opinion, 5 aud would be the minimum price for the AGM-ZFX-OXR conglomerat....production of nickel and copper will be duplicated in one or one and half year and Zinifex has a lot of projects too.

Have you got more information about the roumor?

 

[PBH]

It could be that Xstrata is interested in Oxiana as a standalone company, and would rather pay the merger-breakoff fee to Zinifex, than to take it on board as part of the package.

This COULD explain the price difference. Can't think of anything else.... (the ZFX dividend payout maybe?)

 

[Birdster]

Does anyone have an idea as to why ZFX is in "Pre Open"? There is only a change in substantial... ann out.

Curious

 

[Lukeyz]

They just made an announcement of a New Zinc Discovery in Tasmania.. Or was it really AGM's find?????

Cheers

 

[vishalt]

Dear shareholders of Oxiana and Zinifex.

I'm a little boy of a shareholder.

But I want to be part of a dream.

The dream to create a major diversified mining company that sells Zinc, Copper, Lead, Gold and hopefully Aluminum, Iron Ore and Energy products later on the way.

This dream is possible through the merger of Zinifox.

Both their risk profiles will be significantly reduced, just because the specualtors keep saying there will be surplus Zinc doesn't mean they will be right.

Zinc has rallied to 8% to 1.05/p in just the last two days.

Now imagine Zinifex and Oxiana together, a major producer with major synergies and a reduced risk profile.

Oxiana and Zinifex have a fantastic blend of projects coming up: Martabe and Prominent Hill for the mighty Ox. Dugald and Izok for Zinifex.

In the long-term these projects will rein in heaps of money and the share price will still go up.

Even if the Zinc price stays depressed it will still contribute significant profits and I am sure that both boards will focus-fire on the commodities that are doign well and in my opinion, what analysts say half the time are bull****, Zinc will rally hard at a point because there is still decades of demand from BRIC and other emerging countries.

Be part of the dream folks.

And the bonus is, Zinifex and Oxiana are so hot together, it'll be Cherry Ripe for Teck Cominco or Freeport McMoran or even Anglo American which doesn't have too much Zinc.

Can't rule any of these global carnivores out. And what's a "mid-tier" mining company anyway? They all seem to be taken over, I can't spot too many of those around the world, they tend to get eaten!

 

[GREENS]

Now imagine Zinifex and Oxiana together, a major producer with major synergies and a reduced risk profile.

Vishalt

Whilst I agree the merged company will have much greater market power in terms of being a more significant miner I can’t really see how a combined ZinOx will achieve major synergies. The companies do not have overlapping operations where costs can be cut and resources pooled or used more efficiently.

I think it is more of a defensive move from both sides of management in order to stop both companies falling prey to the larger miners and instead combining the organisations to be able to compete with these large mining houses (not the likes of BHP & RIO of course). How will such a company be created, through organic growth with Oxiana’s near term producing projects (Prominent Hill & Martable) and through acquisition with Zinifex’s wards of cash. It is clear by combining the complementing attributes i.e. Oxiana’s growth profile and Zinifex’s acquisition power; they have all that is needed to help catapult them into and subsequently compete with the big league.

Do not hold either Oxiana or Zinifex but have closely followed both.

 

[PBH]

Forget about major synergies. I'd like to see someone actually try and point out even very minor synergies... because if they're there, they sure are hard to find.
This reminds me of an interview I saw on Sky Business with Michelmore, right after the merger was announced. I nearly fell of my chair from laughter. It went something like this:
reporter: "what are the synergies achieved by this merger"
Michelmore (feeling a little uneasy about the question): "well.... we'll be merging the administrative departments, the management teams as well as pooling our resources"
reporter (fishing for even the most minor of synergies): "so will any administrative staff be cut as a result of the merger?"
Michelmore: "no, we have great staff who are very valuable blah blah blah...... so no, I don't forsee that happening"

TRANSLATION: "no, there are no synergies whatsoever"

Keep in mind that we are going by the correct and proper meaning of the word 'synergy'. As most people will be aware, merely merging two departments certainly does not fall withing it's meaning.

I also think that the lack of synergies is a large part of the reason the price hasn't received much of a boost subsequent to the merger announcement.

And if the rumor of the Xstrata offer for OXR (sans ZFX) turns out to be true, I certainly won't be crying about it (as a ZFX holder).

I'm not a great believer in increasing the size of a company merely for the sake of exactly that: increasing it's size; even if it does ward off future takeover bids..

And I don't necessarily see 'being in the big league' as a guaranteed recipe for success.
One does has to ask themselves: are companies successful because they are in the 'big league'...... or are they in the 'big league' because they are successful?

I'll go for option no.2

 

[GREENS]

PBH, I see where you are coming from, but in my opinion there merger was to ward off takeover offers that significantly undervalue the two businesses. Management of both companies believe that there is a lot of value that is currently not derived in the company’s share prices and as a result thought it best to combine the two entities to move forward rather than felling pressured by short sighted shareholders (which most of us are, whether we like to admit it or not) to sell out to a larger counterpart at a significant discount to their future cash earnings generated over the long term.

Management view on the long term trend in the base metal prices particularly zinc is just one justification of this point. Both CEO’s particularly Owen Hegarty believe given the current and continued strength of China’s demand and the potential that India, Brazil, Russia and other East Asian countries have combined with the re-emergence of the US out of its current slump that base metal prices are still in the early to mid stages of a major commodities bull. They would rather combine their activities and compete with the bigger league than be consumed by them at what they believe are basement low prices.

So as you say while it may seem like a combination to most to just grow and become a much larger entity, in my view management believe they understand the true potential of the resource boom and the potential that each combined company has and have in turn decided that they don’t want to be gobbled up just quite yet.

Also totally agree with you on the limited synergies if any at all.

 

[vishalt]

Okay that's a good point I suppose, I tried to do some reading on this and all I found was:

"Grant Samuel said that while merger synergies were not expected to be material, it was likely that some corporate cost reductions would be achieved. It said the cost reductions could be in the order of $20-$30 million a year between the two Melbourne-based companies."

It isn't really that much but maybe more will be realised after the actual merger.

But anyway synergies or not I am fully supporting this deal because the combined prospects of both companies are just awesome and maybe they can realise more savings down the track.

Say if Oxiana finds a mine close to Zinifex and they essentially they can both use each other's infrastructure then that's a bonus.

 

[uhu]

Hello my aussie friends,

I have a question about tax of dividend.

In ZFX's website we can read this:
"Announced a dividend of 35 cents per share, fully franked payable on 21 April 2008. The record date for entitlement to this dividend is 7 April 2008, and the ex–dividend date will be 1 April 2008."

So, earlier I thought it means I don't have to pay tax after the dividend. "Fully franked"

But, my broker firm says I have to pay tax, so the tax is deducted.
My broker firm attached something (maybe from an australian firm) to the email, this:

""Dividends on which corporate taxes have already been paid, are called fully franked or partially franked. If the company has not paid the corporate tax, the dividend is called unfranked. Fully franked dividends are not subject to withholding tax. The unfranked portion of a partially franked payment and unfranked dividends are subject to withholding tax."


So, do I have to pay tax or my brokerfirm is "a bit creative"?

(I am sorry, my English is not correct and I am not a tax-expert.)

 

[senorita]

What is going on with ZFX and OXR at the moment? Don't know whether to pick up some more whilst the stock is under $10 or not...

 

[vishalt]

What is going on with ZFX and OXR at the moment? Don't know whether to pick up some more whilst the stock is under $10 or not...

I am!

Oxiana unfortunately had a fire in its Seppon mine today which caused some weakness in the stock.

**** happens and Oxiana is extremely cheap compared to BHP/Rio IMO.

 

[Fung]

Does anybody know what's going on with ZFX? Is it suspended due to the merge....???? And also any news of it?

Cheers

 

[oldblue]

Does anybody know what's going on with ZFX? Is it suspended due to the merge....???? And also any news of it?

Cheers

They are being traded as

OXRN

Ordinary fully paid deferred ex Zinifex, until such time as legalities are completed.

Closed today at $2-61, up 5c

 

[Fung]

They are being traded as

OXRN

Ordinary fully paid deferred ex Zinifex, until such time as legalities are completed.

Closed today at $2-61, up 5c

Thanks thanks So what's the conversion rates going to be? I mean how many "ZFX" shares as 1 "OXRN" shares?

And I've just found that I've had extra "shares" of OXR. For example: I suppose to have hmm.. say... 20000 shares before and now i have 29610 shares?

 

[oldblue]

Thanks thanks So what's the conversion rates going to be? I mean how many "ZFX" shares as 1 "OXRN" shares?

And I've just found that I've had extra "shares" of OXR. For example: I suppose to have hmm.. say... 20000 shares before and now i have 29610 shares?

You should have this in the paperwork from the company but ZFX holders receive 3.1931 OXR shares for each 1 ZFX share. So a holder of say 1,000 ZFX ends up with 3,193 shares which are currently designated OXRN and will eventually become 3,193 Oz Minerals shares when the new name is adopted.
Us poor old OXR shareholders get 1 OZ Minerals for 1 OXR.

Both OXR and OXRN shares taking a hammering today and down to $2-37. They should both trade at the same price as there is no arbitrage profit to be made, they are effectively the same stock.
I'll be showing some buying interest when the downtrend reverses!