Value Microcaps Motherboard

[cliffvb]

EZM and Lundin merger.

I don't like it. EZM drops in price for the exchange rate to work. That looks like a takeunder for EZM stockholders to me.

From Kitco, analysts have Lundin's 2006 and 2007 forward PEs at 7.4 and 9.7 respectively. EZM is cheaper as its forward PEs are only 6.9 and 4.7.
EZM is also cheaper in terms of estimated cash flow. Lundin is buying a minority interest (49%) in a Russian mine. How politically stable is that? It wasn't that long ago that the Russians screwed us over in CHAR! Merging with EZM does allow Lundin to not have to clean out their bank account to buy their interest in the Russian miner for $125 Mil but what is in it for EZM? EZM's CEO probably gets a big raise since he will be presiding over a company that has doubled in size but that doesn't do me any good.

That being said, I will hold and see what happens. There is no huge insider interest and the merger requires 65% approval by EZM stockholders. There could easily be a bigger offer come out for EZM in the next month.