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Universal asks shareholders to reject Ichor bid

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World Coal,

United Coal has recommended shareholders reject a bid for the company by IchorCoal, saying the offer of AUS$0.16 per share is “inadequate, highly conditional and opportunistic.”

IchorCoal had set out its intention to bid for the shares in United that it did not already own on 21 August. Since then, a subcommittee of United’s board of directors has been considering the proposal.

“After careful consideration, the subcommittee is unanimous that Ichor’s proposed offer does not reflect the inherent value of Universal Coal,” said United’s Non-executive Chairman, John Hopkins. “The offer is also highly conditional and lacking certainty of completion.”

“Ichor appears to have understated production figures from the Kengala colliery, which is already high cash flow generative,” continued Hopkins. “In additional, the offer does not adequately value the material earnings impact that the company’s next operation, NCC, is expected to deliver when it comes on stream later this year.

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