Coal of Africa’s (CoAL) proposed acquisition of Universal Coal has passed its latest test, receiving unconditional approval from South African regulator, Competition Commission South Africa.
“The approval is a positive step towards successful concluding the merger between CoAL and Univesal,” said David Brown, CEO of CoAL.
CoAL agreed to buy Universal Coal for AUS$91 million in November in a deal described by Brown at the time as a “springboard to creating a new coal mining force.”
“The combination of Universal’s producing assets and CoAL’s development portfolio, coupled with the excellent shareholder support, ensure that the merger, as a first of its kind in the South African coal industry, will not be the last.”
ASX-listed Universal Coal currently produces 2.4 million tpy of coal with an additional 2 million tpy expected to come online in 2016.
Following the Competition Commission South Africa approval, CoAL has lodged the official offer document with the Australian Securities and Investments Commission. Unless extended or withdrawn, Universal shareholders now have until early March to accept the offer.
Currently, CoAL has received irrevocable undertakings to accept the offer from shareholders representing 43.37% of Universal’s stock, as well as unanimous approval from the company’s independent directors.
CoAL shareholders representing 62.63% of the company’s stock have also provided voting intention statements indicated that they will vote in favour of the offer.
Under the terms of the offer, CoAL is offering eligible Universal shareholders AUS$0.20 in cash and one new share in CoAL per Universal share. Where shareholders are ineligible for the cash-and-share offer – such as those domiciled in the UK – CoAL is offering a cash-only deal worth AUS$0.25 per share.
“This is a compelling offer that immediately crystallises value for our shareholders, yet allows shareholders to retain exposure to the consolidated group,” said Tony Weber, CEO of Universal, when the offer was unveiled in November. “Looking ahead, we see exciting times for the merged group.”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/21122015/coal-progresses-universal-takeover-3324/