[miningmx.com] – ICHORCOAL would “consider its options” were a rival bid to emerge for its takeover target Universal Coal, said the German firm’s CEO, Nonkululeko Nyembezi-Heita.
Nyembezi-Heita was commenting on the same day IchorCoal formally tabled a 16 Australian cents per share cash offer for shares in Universal Coal it doesn’t already own, valuing the business at A$80.9m (R789m).
The 16 cents/share offer represents a significant premium of 46.5% over the 60-day volume-weighted average price of just under 11 cents on August 20 – the last business day prior to the firm intention announcement – and a premium of 45.5% to the closing price of 11 cents per share on that day.
IchorCoal, which is controlled by Frankfurt-listed firm Sapinda Holding, itself founded by colourful German entrepreneur, Lars Windhorst, began takeover negotiations with Universal Coal in July. After failing to reach a valuation, IchorCoal took the offer hostile.
Since then, Universal Coal rejected IchorCoal’s offer, saying it undervalued the company, and then added in a later statement that it had received an indicative rival offer from a company, unnamed, that had South African coal exposure.
This raises the prospect of a takeover battle for Universal Coal which first listed on the Australian Stock Exchange at 26 Australian cents per share before sinking to a 6c/share low in mid-2013 whilst building its first mine, Kangala.
However, Nyembezi-Heita said any talk of registering an improved bid was premature.
“We have not seen a [rival] offer come out with any certainty for Universal Coal, nor the terms of it. So it’s like boxing with shadows at the moment,” she said in an interview with Miningmx.
“I can’t really respond whether we’d join a bidding contest. We are just as confused as the next person to be honest [about the rival bid], but we will consider our options at the time,” she added.
Universal Coal now operates two mines in South Africa’s Mpumalanga province – Kangala and New Clydesdale Colliery – and has run-of-mine production of in excess of five million tonnes/year (Mtpa).
In rejecting IchorCoal’s offer, Universal Coal observed the German firm had to fund a proposed capital increase, effectively an equity raise. Nyembezi-Heita said this process of identifying buyers for its share had begun, but that the offer would be underwritten by Sapinda Holdings.
“We believe our 16c/share offer is a firm one,” said Nyembezi-Heita. “If the Universal board was happy with our initial investment [30% less than the current takeover offer] then nothing should have changed to the picture,” she said.
Shares in Universal Coal were last trading at 18 cents per share – roughly a three-year high that IchorCoal said was a function of its own offer. The first closing date of IchorCoal’s offer is set down for December 3.
