Coal takeover targets

ASTON Resources, Cockatoo Coal, MetroCoal, Bandanna Energy and Guildford Coal have all been identified as ripe for foreign takeovers by Sydney-based Foster Stockbroking.
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Blair Price

In a research report on merger and acquisition possibilities, Foster was inspired by Glencore International chief executive officer Ivan Glasenberg’s comments last month.

Back then he said many potential acquisition targets were a lot cheaper to buy after the market sell-off. Given that global share markets have remained volatile since, Foster expects more takeover plays to transpire this year.

“Selective and strategic M&A from the majors using cash as consideration will remain an ongoing theme throughout 2011,” Foster said.

While the stockbroker devoted a lot of attention on takeover prospects for Africa-focused resource stocks, Australian coal stocks have become a somewhat endangered species over the years and Foster did not overlook this scene.

On Gunnedah Basin coal hopeful Aston, Foster said potential acquirers included Hong Kong-based commodities trader Noble Group and Japanese trading house Itochu.

Japanese conglomerate Mitsui was rated as another possible acquirer for Aston and for Queensland and Mongolian coal explorer Guildford.

Guildford’s recent push into Mongolia seems to have attracted a horde of potential acquirers according to Foster, which also listed Indonesian giants PT Adaro Energy, PT Bumi Resources and PT Bayan Resources as potential suitors, along with Centennial Coal acquirer Banpu, Korea Electric Power and China Investment Corporation.

Small Queensland metallurgical and thermal coal producer and significant explorer Cockatoo has long been on the radar and Foster said its potential acquirers included KEP, steelmaker Posco, Mitsui, Harum Energy and SK Networks.

Interestingly, mining magnate Nathan Tinkler’s Boardwalk Resources was rated as another potential bidder for Cockatoo.

But Boardwalk has been an active dealmaker in the past and farmed-in to Coalworks’ promising Ferndale underground project plus bought two Central Queensland coal projects from Norton Gold Fields last year.

Bandanna Energy, which has significant exposure to the Galilee Basin among its vast Queensland coal project portfolio, was considered a likely target for Indian players Adani and GVK, along with Felix Resources acquirer Yanzhou Coal.

MetroCoal, which aims to introduce longwall mining to Queensland’s Surat Basin, already has significant Chinese investors.

Foster has consequently listed China’s DADI Group, Jien Mining, China Coal and Yanzhou as potential acquirers for this explorer.