IchorCoal CEO Nonkululeko Nyembezi-Heita
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – South Africa-focused coal miner Universal Coal on Wednesday reiterated its sentiments regarding the proposed takeover offer from shareholder IchorCoal, noting that it would be at the expense of Universal’s shareholders, while being highly accretive to IchorCoal’s shareholders.
In August, IchorCoal, led by CEO Nonkululeko Nyembezi-Heita, announced its intentions to make an all-cash offer of A$80-million to acquire all the outstanding shares in Universal, offering that company’s shareholders A$0.16 a share.
It already held a 29.99% stake in Universal.
The ASX-listed midtier coal miner on Wednesday advised its other shareholders to take no action on the proposed offer, stating that the offer was highly conditional and ignored the value of its near-term production coal operations near Witbank, in South Africa’s Mpumalanga province, and its longer-term development pipeline.
Universal also felt that the offer represented a low valuation multiple based on its existing production, seemingly without any premium for control.
It added that the proposed offer was at a discount to IchorCoal’s own entry price.