The Australian Financial Review said that Australia's Gloucester Coal will wait till Yanzhou Coal Mining Co completes inspecting its books before deciding whether to recommend Chinese firm's AUD 2 billion takeover offer.

Mr James MacKenzie chairman of the Australian miner was cited as saying in the newspaper that “I am waiting until the extensive due diligence work is completed next month.”

Shares in Gloucester have climbed 22% since Yanzhou's takeover proposal on December 23 still short of the AUD 10.16 per share implied deal value, which analysts said reflected investors' uncertainty over the value of Yancoal's assets.

Under the proposed deal backed by Gloucester's major shareholder Noble Group, the Australian miner would be merged with Yancoal Australia Ltd., and Yanzhou will own 77% of the new company.

Gloucester shareholders will own the rest and receive AUD 700 million in cash, the equivalent of AUD 3.20 in per share.. Each Gloucester Coal shareholder will receive one share in the merged company.

The deal puts Yancoal on course to meet a requirement to float 30% of its Australian assets by the end of 2012, a condition of its AUD 3.3 billion takeover of Felix Resources in 2009.

(Sourced from Reuters)