Australian miners, Gloucester Coal Ltd and Whitehaven Coal Ltd, have agreed to merge the two companies in a deal which values the combined entity at around $900 million.
Company chairmen chairman Andy Hogendijk of Gloucester and John Conde of Whitehaven said the merger will deliver "significant" benefits to both groups of shareholders. Mr Conde will become chairman of the combined group with Mr Hogendijk as deputy chairman. Whitehaven managing director Tony Haggarty will be managing director for an interim period before handing over to Gloucester MD Rob Lord.
"The two companies have complementary operating assets and development projects and the merged entity will be well positioned to deliver strong growth over the next five years," the two chairman said in a joint statement.
The new company - which will be renamed after the merger has been completed - will have seven mining operations, with saleable production of about 4.5 million tonnes per year. It will also control two new projects in development and a portfolio of exploration assets.
Whitehaven shareholders are being offered one Gloucester share for every 2.45 Whitehaven shares and the company's directors intend to accept the offer in respect of their own shareholdings, which collectively represent 74 per cent of the group, in the absence of a superior offer.
Gloucester also has entered into pre-bid acceptance deeds in respect of 19.9 per cent of the shares in Whitehaven.
"We believe the proposed transaction will create value for both Gloucester and Whitehaven shareholders," Mr Conde and Mr Hogendijk said.
Gloucester requires a minimum acceptance of 80 per cent of Whitehaven shares for the offer to proceed, which is subject to Foreign Investment Review Board approval and Whitehaven shareholder approval.
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