Western Coal (WTN.L) (WTN.TSX) 'combination' with Walter Energy

Thursday, Nov 18 2010 by

Looks like a friendly takeover of WTN announced by RNS this morning, dependent on conclusion of agreement by December 1st.  WTN opened at £4.56 and seems to have settled at £6.15.  At an offer price of CAD$11.50 it has a little more to run. I would be very surprised if this one does not go through.  The offer price looks good from both points of view IMO.

RNS highlights:-

"Vancouver, BC, November 18, 2010 - Western Coal Corp. (TSX: WTN, WTN.WT and AIM: WTN) (the "Company" or "Western") announced today that it has entered into an exclusivity agreement with, and received a proposal regarding a strategic business combination (the "Combination") from Walter Energy, Inc. (NYSE: WLT) ("Walter"), a leading US producer and exporter of hard coking coal for the global steel industry."

"If concluded, the Combination proposal contemplates a plan of arrangement transaction whereby Western shareholders would receive a mixture of cash and Walter shares valued at $11.50 per Western share. The proposed value represents a premium of 55.8% to Western's closing price yesterday of $7.38 on the Toronto Stock Exchange."

"Walter's proposal is subject to due diligence and negotiation of definitive agreements. During the due diligence period, Western has agreed to work exclusively with Walter for a period of up to 14 days expiring December 1, 2010. If a definitive agreement is not reached, no penalties will be incurred by either party. The Combination would be subject to approval by shareholders of Western and regulatory authorities."

"Western also announced that it was informed today by its largest shareholder, Audley European Opportunities Master Fund Limited ("Audley"), that Audley has signed an agreement to sell approximately 54.5 million common shares of Western (representing approximately 19.8% of Western's 276.1 million basic common shares outstanding, excluding common shares held by wholly-owned subsidiaries of the Company) to Walter at a price of $11.50 per share, or total consideration of approximately $630 million,"


I've had a small holding in WTN for some time and lately began to add on dips.  I was intending to do a write up for the boards but it looks like I'm too late!





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2 Posts on this Thread show/hide all

Mattybuoy 18th Nov '10 1 of 2

I have this in my fantasy fund. Now because of this I am "non-compliant" due to making too much money. D'oh!

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fuiseog 3rd Dec '10 2 of 2

Happily it's not in my fantasy fund. RNS this morning confirming the takeover.


Walter Energy (NYSE: WLT) and Western Coal Corp. (TSX: WTN, WTN.WT and AIM: WTN) announced today that they have entered into an arrangement agreement (the "Agreement") for Walter Energy to acquire all of the outstanding common shares of Western Coal for CAD$11.50 per share in cash or 0.114 of a Walter Energy share,

The Agreement has been unanimously approved by both companies' boards of directors and is expected to be completed by the second quarter of 2011.

Quite a rollercoaster ride with WTN falling to £2.20 in August this year. I was very tempted to top up at the time but diden't want to increase exposure. C'est la vie!

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