Despite media speculation before Easter that Yanzhou did not make the shortlist of bidders for Whitehaven, the company confirmed interest from the Chinese coal miner in an ASX announcement.
“In response to media reports, Whitehaven Coal Limited confirms that Yanzhou Coal is one of the shortlisted parties involved in the current process in relation to a potential corporate transaction involving Whitehaven,” the company said.
“Whitehaven has not been advised of any change to this status.”
Whitehaven’s shares rose by 3c to $6.81 this morning after a sell-off before Easter on the rumours that Yanzhou was no longer in the race. Analysts believe that Whitehaven would seek a bid of $7.50 per share which would value the company at $3.7 billion.
The newly elected New South Wales government approved a minor planning modification to the second-stage development of Whitehaven Coal’s North Narrabri longwall mine under Part 3A of the state’s planning laws, just days after the election and before Premier Barry O’Farrell halted the Part 3A system.
The government approved the second-stage development plans back in July 2010, allowing the Narrabri mine to start longwall mining and ramp up to 8 million tonnes per annum of production.
On February 7, Whitehaven advised that it had received a number of non-binding indicative proposals and a selected shortlist of parties had been invited to complete detailed due diligence and submit binding proposals.
The formal process is now reaching a conclusion with shortlisted parties having completed due diligence and submitted formal proposals.
Whitehaven is in discussions with a number of these parties to determine which proposal, if any, will be recommended by its board. “These discussions may or may not result in a final proposal being recommended by the board,” the company said in a statement earlier this month.
Other bidders in the process are believed to be the Indian giant Aditya Birla and Peabody Energy.
Yanzhou already has a strong coal mining presence in Australia after completing its acquisition of Felix Resources in early 2010.
If it makes a successful bid for Whitehaven, Yanzhou might seek consent from the Foreign Investment Review Board to delay listing its Yancoal Australia subsidiary, as it will need time to integrate Whitehaven’s mines.
In gaining FIRB approval to acquire Felix, Yanzhou agreed to float Yancoal on the Australian Securities Exchange by the end of 2012 and to own less than 70% of the company at that time.
Yanzhou chairman Li Weimin discussed the merits of the Yancoal float in the company’s recent annual report.
“Direct financing channels in different currencies are available by taking advantages of the listing platform, thus providing direct financing at low cost,” he said.