New Hope is making an unconditional offer of $2 for each Northern Energy share, which is a 32.6% premium to its one month volume-weighted average price of $1.52 to August 26.
New Hope chairman Robert Millner said: “The offer provides Northern Energy’s minority shareholders with an opportunity to realise an attractive premium for their shares at a time when global equity markets are experiencing significant uncertainty.
“Northern Energy has future funding requirements of approximately $640 million and this offer allows shareholders who don’t want to participate in future capital raisings to exit their investment without being diluted.”
Northern Energy’s Elimatta open cut project in the Surat Basin hosts 106 million tonnes of marketable reserves with mine construction slated for late 2011.
New Hope said the offer price would not be increased and it was unlikely that any competing proposal would emerge due to its controlling interest in Northern Energy.
“Northern Energy needs substantial development capital in the short and medium term,” it said.
“Northern Energy has future funding requirements of $664 million, including a requirement of approximately $240 million over the next 12 months.”
If New Hope acquires at least 90% of the Northern Energy shares, it will seek to compulsorily acquire the remaining Northern Energy shares.
New Hope increased its total coal resources by 56% to 1.53 billion tonnes while its coal reserves were boosted 12.4% to 544Mt in May this year.
Its key Acland open cut mine, which was isolated by rail between January and late March because of the flooding events earlier this year, holds 855Mt of resources including 410Mt measured and 435Mt indicated.
This mine also hosts the bulk of the company’s reserves with a total of 492Mt, including 303Mt of proved coal reserves.
New Hope’s Lenton project holds 52Mt of reserves including 21Mt proved.
In May this year New Hope agreed to sell 10% of Lenton to Mai-Liao Power Corporation, a member of the Formosa Plastics Group of Taiwan, for $A58.4 million if at least 200Mt of resources were calculated in the Lenton project area.
New Hope’s latest resource upgrade reveals the project has 282Mt of resources, including 53Mt measured.