Walter in $3.3bn bid for Western
Friday 19 November 2010
US group Walter Energy is in talks to buy Western Coal Corp, its Canadian peer and AIM's largest company, for $3.3bn in a bid to cash in on growing Asian demand for coal.
Walter will pay C$11.5 per share in cash and stock, offering nearly 56 per cent more than Western Coal's closing price on Wednesday. It has agreed to buy around 20 per cent of Western Coal shares from the company's biggest shareholder, the London-based hedge fund Audley Capital.
News of the deal comes against the backdrop of surging demand for coal from emerging markets such as China and India. Chinese steel production, for example, is forecast to rise to as much as 630 million tonnes this year, feeding demand for metallurgical coal, Western's primary offering.
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