Looks like UBS Analysts have been reading our blog re KAZ..?

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Following on from our blog below (http://www.spreadbetmagazine.com/blog/thought-of-the-day-re-kaz.html) from yesterday, it is interesting to read the following in todays press – 

Analysts at UBS noted that the consortium of three founding ENRC investors and the Kazakh government considering an offer for the group are likely to bid for both Kazakhmys’s 26pc stake in the company as well as ENRC’s free float, because the suitors would need 75pc shareholder approval to take the miner private.

That, the analysts argued, meant an offer may be “significantly above market value”, as Kazakhmys is likely to “leverage” its influential position to “extract optimal value for itself and ENRC minority shareholders”.

Kazakhmys, they said, was unlikely to agree to an offer of less than 375p a share – the value at which it recently wrote down its ENRC stake – while a bid of 540p – ENRC’s 2007 flotation price – was also possible. That would be a significantly premium to yesterday’s close of 280.7p, down 1.6p.

If the consortium did make a knock-out bid for ENRC it would be “materially positive” for Kazakhmys’s own share price, the UBS analysts concluded. The optimistic assessment helped Kazakhmys advance 23.94 to 359p on the FTSE 250, taking into account the shares were trading without right to the latest dividend.

We have laid out our valuation case and with today’s IMS statement expect a price closer to 500p than 300p in the weeks agead.

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