MetroCoal makes scrip offer for Cape Alumina

METROCOAL says it intends to make a scrip offer for the remaining 43% stake in Cape Alumina.
MetroCoal makes scrip offer for Cape Alumina MetroCoal makes scrip offer for Cape Alumina MetroCoal makes scrip offer for Cape Alumina MetroCoal makes scrip offer for Cape Alumina MetroCoal makes scrip offer for Cape Alumina

 

Justin Niessner

The coal company acquired a 57% holding in Cape through an on-market bid that closed in May.

Since then the company has been assisting in the development and optimisation of Cape’s Bauxite Hills project in Queensland.

In response to the company latest takeover attempt, the Cape board said it had established a takeover defence committee.

The committee includes Cape non-executive director George Lloyd as chairman and non-executive director Ken Xiao.

“We will review the offer documentation after it has been received and will advise shareholders accordingly,” Lloyd said in a statement this morning.

“In the meantime, we advise shareholders to take no action.”

MetroCoal is offering existing Cape shareholders one MetroCoal share for every 1.3 Cape shares.

The offer represents a premium of about 35% to the 20-day volume-weighted average price to August 1 for Cape shares.

If the bid is successful, the merged entity will hold both bauxite tenements in Cape York and thermal coal assets in the Surat Basin, as well as some $A6 million in cash.

“MetroCoal strongly believes that the proposed offer presents Cape with the best opportunity to provide the funds necessary to accelerate Bauxite Hills and is in the best interest of both Cape’s and Metro’s shareholders,” MetroCoal said.

“Should MetroCoal not gain full control of Cape, then Cape will be required to raise funds through other mechanisms and it is Metro’s view that this could delay the Bauxite Hills project, disadvantaging all shareholders.”

The news follows a failed attempt to merge the two companies last year when a Queensland government environmental decision blocked development of Cape’s flagship Pisolite Hills project.

Cape and MetroCoal had intended to form an enlarged company initially focusing on Pisolite Hills to capitalise on strong bauxite markets, with plans to develop thermal coal in the longer term.

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