JOHANNESBURG (miningweekly.com) – Universal Coal’s independent directors have again called on shareholders not to accept fellow South Africa-focused IchorCoal’s A$0.16 a share cash takeover offer.

Ichor, which already held a 29.99% stake in Universal, on October 1, officially launched its takeover bid.

Since it was notified of Ichor’s intention to acquire all Universal shares, at the end of August, the coal miner had, on several occasions, advised shareholders not to take any action, as it believed the offer was inadequate and did not reflect the inherent value of the company.

Universal on Friday said shareholders would soon receive an offer document issued by Ichor, adding that, “the Ichor offer remains highly conditional, including a minimum acceptance condition of 50%, among numerous subjective conditions that are for the benefit of Ichor and provide no assurance to shareholders that the offer will be completed”.

A subcommittee of Universal’s independent directors, who all planned to reject the offer, were concerned that, despite the “detailed knowledge” of Universal held by Ichor through having nominee directors on the Universal board, Ichor continued to make incorrect statements in its offer document.

This, it said, related to statements that Universal was being negatively impacted by the price of seaborne thermal coal, whereas Universal was primarily a producer of thermal coal for the domestic South African market and benefited from local prices secured under long-term sales agreements with power utility Eskom.

Further, the independent directors pointed out that Universal’s share price on the ASX was trading at a premium to the Ichor offer, with the five-day volume weighted average price of its shares on the ASX to October 7 having been at A$0.179.

KPMG Financial Advisory Services (Australia) was preparing an independent experts report to determine whether the Ichor offer was fair and reasonable. The finalization of the report was expected shortly.

In the mean time, Universal’s independent directors and their advisers were continuing discussion with another party that had made a nonbinding indicative proposal to acquire Universal at A$0.20 a share.

As previously communicated, Universal had opened a data room to “credible, interested alternative bidders”.