Alpha Natural Resources close to acquiring Massey Energy for around $7-billion
29 Jan 2011
Alpha Natural Resources, the third-largest coal producer in the US, is close to finalising a deal to acquire Massey Energy, the sixth-largest coal producer in the US, for around $7 billion, according to a report from Bloomberg.
Citing a person familiar with the situation, the paper today said that Alpha will be offering around $68 to $69 a share, valuing Massey at around $7 billion.
Massey shareholders will receive about 1.025 Alpha shares, plus $10 in cash for each share held, representing a premium of nearly 20 per cent to Massey's closing share price yesterday, according to the person who declined to be identified because the talks are private.
Apart from Alpha, Coal India Ltd (CIL), the world's largest coal producer, and ArcelorMittal, the world's largest steel producer, were in the race to buy assets in part or whole of Massey. (See: Coal India, Alpha Resources, ArcelorMittal in race for Massey Energy)
But according to Bloomberg, St. Louis, Missouri-based Arch Coal Inc, was also one of the suitor for Massey.
Richmond, Virginia-based Massey is the largest metallurgical coal producer in the US with 35 underground mines and 12 surface mines having 2.3 billion tonnes of proven and probable coal reserves, of which, more than 1.3 billion tonnes is metallurgical coal that is used in the making of steel.
