Waratah reviews Mineralogy offer

WARATAH Coal has formed a special committee to review the hostile cash bid made by Mineralogy to acquire 50.1% of the coal junior’s stock at $C1.41 per share.

Angie Tomlinson

Private company Mineralogy, headed up by billionaire mining entrepreneur Clive Palmer, made the $C38.9 million ($A47 million) offer for majority ownership of Canadian-listed, Queensland-based Waratah on Friday.

Waratah’s committee will be headed by Waratah director Howard Stack and will include director Andrew Wilson and chairman Nicholas Mather.

Merrill Lynch Canada and Torys have been engaged to assist with the evaluation.

Waratah also announced it has adopted a limited duration shareholder rights plan to provide time to assess and respond to Mineralogy’s offer.

The plan lasts for 180 days and is subject to approval of the Toronto Stock Exchange. The plan does not allow acquisition of more than 20% of the company’s outstanding shares other than in compliance with the plan.

Waratah continued to advise shareholders Wednesday to take no action over the bid.

Waratah originally labelled the grab “opportunistic”, saying the price substantially undervalued the company and its assets.

The coal junior plans to develop a new 25 million tonne per annum coal mine, 500km of rail and a new port, worth $A5.3 billion, in the Galilee Basin in Queensland.

However, its initial plans for port and rail infrastructure were scrapped after the Queensland government, along with Australian Environment Minister Peter Garrett, said developing the proposed port site at Shoalwater Bay would be environmentally unsound.

The planned development area, north of Rockhampton, is part of sensitive wetland areas.

The company said it would be looking at other alternatives but has also launched legal action against the federal government to push ahead with its plans.

Waratah also plans to list on the Australian Securities Exchange.

Waratah closed at $1.40 Tuesday on the TSX.

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