Universal spurns takeover offer from IchorCoal

[miningmx.com] – ASX-listed Universal Coal – which owns the Kangala and New Clydesdale collieries in South Africa – has advised its shareholders to reject the takeover offer made by Frankfurt-listed IchorCoal (Ichor) which is run by former Arcelor Mittal CEO Nonkululeko Nyambezi-Heita.

A statement from Universal released today described the Ichor offer as ” inadequate, highly conditional, opportunistically timed and of significant strategic importance to Ichor and highly accretive to its shareholders at the expense of Universal’s shareholders.’

Ichor already owns a 29.9% stake in Universal and launched a full takeover bid on August 21 at A$0.16 a share which was a premium of 45.5% to Universal’s closing price of A$0.11on August 20.

Nyambezi-Heita told Miningmx on July 2 that Ichor’s strategic goal was to grow output to between 15mt/year and 20mt/year and that she viewed the current depressed coal market as a good time to buy assets.

The Universal statement pointed out nearly all of its production is sold to Eskom and the company has not been affected by the drop in the price of export coal as claimed by Ichor.

It also said Ichor had previously approached Universal on June 11 expressing its interest to make an offer at A$0.14 a share and again on July 21 with “indicative offer’ at $0.16 a share.

The Universal board then invited Ichor to carry out a “controlled due diligence’ so as to get ” a more realistic understanding of Universal’s value. Ichor elected not to accept the invitation and instead proceeded to make the offer on an unsolicited basis. “