Queensland coalminer TerraCom has offered to buy peer Universal Coal PLC for about $175 million, as it seeks to expand its global operations.
Under the cash-and-stock deal, a Universal shareholder will get 10 cents in cash and about 0.6026 new TerraCom shares for each Universal share held.
The offer values each Universal share at 33.5 cents, a premium of 42.6 per cent to Friday’s close.
TerraCom’s primary operating mine – Blair Athol – is in Queensland, while Universal’s top operations are in South Africa.
“The offer will allow both companies to continue to run successful coal operations with the improved benefit of geographic diversity and an expanded production footprint,” TerraCom said in a statement.
TerraCom said it understood the Universal Coal board may not have had sufficient time to support the offer, but it had support from a number of institutional investors.
At 1231 AEDT, TerraCom shares were down 4.7 per cent to 30.5 cents, while Universal Coal shares were up 10.6 per cent to 26 cents.
AAP
Be the first to comment