It is reported that BHP Billiton, the world biggest mining company is considering a USD 6 billion takeover of a US coal producer to support its view that supply of the sought-after commodity will be scarcer than iron ore in the next decade.
Speculation from London suggested that the global major, fresh from receiving approval this week for its USD 30 billion Olympic Dam copper and uranium expansion in South Australia was circling Walter Energy, the world's largest producer of coal used for steelmaking.
The Birmingham, Alabama based company was put in play in July when activist hedge fund Audley Capital wrote to the board calling for it to seek a buyer because it lacked the leadership to take advantage of an unprecedented market opportunity after coal prices jumped.
Walter whose share price has been cut in half since April rebounded strongly on the takeover speculation. It jumped 13% in New York to USD 75.22 the biggest gain in five weeks. With Walter Energy's market capitalised at about USD 4.7 billion a bid of about $US6bn could be the target in any takeover move given that analysts expect a 30 per cent bid premium.
Walter which operates mines in Alabama, West Virginia, British Columbia and Wales, acquired Vancouver-based Western Coal in April for CAD 5.3 billion boosting its reach into Canada.
Mr Marius Kloppers BHP chief executive is expected to be in Canada early next week after the company annual general meeting in London, where he is to meet Saskatchewan Premier Brad Wall.
While his visit is said to be an attempt to ease tensions between the miner and the government after BHP USD 39 billion bid for Potash Corporation of Saskatchewan was killed off earlier this year because of political opposition to the deal it is also timely because of the bid speculation.
The global major successful acquisitions this year were in shale gas in the US through a USD 12.1 billion bid for Petrohawk the miner biggest acquisition and the USD 4.75 billion purchase of Chesapeake Energy Arkansas shale ground.
(Sourced from www.theaustralian.com.au)
