Business Combination
18 Noviembre 2010 - 2:06AM
UK Regulatory
TIDMWTN
RNS Number : 4036W
Western Coal Corporation
18 November 2010
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| | 1000 - 885 Dunsmuir |
| | Street |
| | Vancouver, B.C. V6C |
| | 1N5 |
| | Phone |
| | 604-608-2692 |
| | info@westerncoal.com |
| | www.westerncoal.com |
| | |
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| | | |
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News ReleaseWTN 10-28
Western Coal Enters Into Exclusive Negotiations For Potential Business
Combination With Walter Energy
Western Also Announces Sale of Shares by Audley to Walter
Vancouver, BC, November 18, 2010 - Western Coal Corp. (TSX: WTN, WTN.WT and AIM:
WTN) (the "Company" or "Western") announced today that it has entered into an
exclusivity agreement with, and received a proposal regarding a strategic
business combination (the "Combination") from Walter Energy, Inc. (NYSE: WLT)
("Walter"), a leading US producer and exporter of hard coking coal for the
global steel industry.
If concluded, the Combination proposal contemplates a plan of arrangement
transaction whereby Western shareholders would receive a mixture of cash and
Walter shares valued at $11.50 per Western share. The proposed value represents
a premium of 55.8% to Western's closing price yesterday of $7.38 on the Toronto
Stock Exchange. The proposal values Western's equity at $3.3 billion, based on
Western's 291.1 million common shares outstanding on a fully diluted basis
(excluding common shares held by wholly-owned subsidiaries of the Company).
The Combination would create one of the world's largest pure-play
publicly-traded producers of metallurgical coal with geographically diversified
assets in Canada, the US and the UK and with strong market positions in Asia,
South America, North America and Europe. The combined company would have
synergistic technical expertise in both open- pit and underground coal mining.
The combined company's market capitalization and enhanced financial strength
would position it well to execute on strategic growth plans.
Western expects to produce 6.1 million tonnes of coal for the fiscal year ending
March 31, 2011, growing to 10 million tonnes for fiscal 2013. Walter, based in
Tampa, FL, has stated that it expects to produce 6.6 million tonnes of coal in
the calendar year 2010, growing to 8.6 million tonnes in the calendar year 2012.
The vast majority of production for both companies is metallurgical coal.
Due Diligence Period
Walter's proposal is subject to due diligence and negotiation of definitive
agreements. During the due diligence period, Western has agreed to work
exclusively with Walter for a period of up to 14 days expiring December 1, 2010.
If a definitive agreement is not reached, no penalties will be incurred by
either party. The Combination would be subject to approval by shareholders of
Western and regulatory authorities.
Walter's proposal is not binding on either party, except with respect to the
exclusivity obligations. Western cautions that no definitive agreement has been
entered into and accordingly no assurance can be given that the negotiations
between Western and Walter will lead to a transaction that is consistent with
Walter's proposal or to any transaction at all.
Western does not intend to make any further announcements or communications
regarding this potential transaction until either a definitive agreement has
been reached or discussions are terminated without such an agreement being
reached.
Western has retained RBC Capital Markets as its financial advisor, Goodmans LLP
as its Canadian legal advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP
as its US legal advisor. Western's UK advisors are Trowers & Hamlins LLP (legal)
and Cenkos Securities plc (Nominated Advisor).
Western has established a committee of its independent directors to consider the
Walter proposal. Deloitte & Touche LLP is acting as independent financial
advisor to the special committee.
Walter's agreement with Audley
Western also announced that it was informed today by its largest shareholder,
Audley European Opportunities Master Fund Limited ("Audley"), that Audley has
signed an agreement to sell approximately 54.5 million common shares of Western
(representing approximately 19.8% of Western's 276.1 million basic common shares
outstanding, excluding common shares held by wholly-owned subsidiaries of the
Company) to Walter at a price of $11.50 per share, or total consideration of
approximately $630 million, subject to adjustment in certain circumstances.
Western is not a party to the share purchase agreement.
Under the share purchase agreement, the Western shares would be sold in two
instalments. Upon the satisfaction of certain closing conditions, Walter would
acquire approximately 25.3 million common shares for cash, with the balance to
be acquired for cash or Walter stock immediately upon the combination of Western
and Walter or, in any event, no later than April 30, 2011. The sale by Audley to
Walter of 54.5 million common shares of Western is subject to the expiration or
termination of the applicable waiting period under the US Hart-Scott-Rodino
Antitrust Improvements Act and compliance with any other applicable competition
laws.
Western has been advised that a copy of the share purchase agreement will be
filed by Audley on SEDAR (www.sedar.com) and by Walter on EDGAR (www.sec.gov).
About Western Coal
Western Coal is a producer of high quality metallurgical coal from three mines
in northeast British Columbia (Canada), high quality metallurgical coal and
compliant thermal coal from four mines located in West Virginia (USA), and high
quality anthracite and metallurgical coal in South Wales (UK). Other interests
owned include a 24% interest in Mandalay Resources Corporation (MND: TSX), 40%
interest in Xtract Energy (XTR: AIM), and a 20% interest in NEMI Northern Energy
& Mining (NNE.A: TSX). The Company is headquartered in Vancouver, BC, Canada,
and trades on the AIM and TSX stock exchanges under the symbol "WTN". More
information can be found at www.westerncoal.com
Forward-Looking Information
This release may contain forward-looking statements that may involve risks and
uncertainties. Such statements relate to the Company's expectations, intentions,
plans and beliefs including, in particular, statements relating to a potential
strategic business combination between the Company and Walter and the terms of
any such transaction. These statements are not guarantees of future performance
and involve risks, uncertainties and assumptions that are difficult to predict.
Actual outcomes and results may differ materially from what is expressed or
forecasted in these forward-looking statements as a result of various important
factors, including, but not limited to: the Company's ability to negotiate a
potential strategic business combination with Walter; the price, terms and
conditions of any such transaction; the benefits of any such transaction and its
impact on the Company's business;, changes in commodity prices; strengths of
various economies; the effects of competition and pricing pressures; the
oversupply of, or lack of demand for, the Company's products; currency and
interest rate fluctuations; various events which could disrupt the Company's
construction schedule or operations; the Company's ability to obtain additional
funding on favourable terms, if at all; and the Company's ability to anticipate
and manage the foregoing factors and risks. Additionally, statements related to
the quantity or magnitude of coal deposits are deemed to be forward looking
statements. The reliability of such information is affected by, among other
things, uncertainties involving geology of coal deposits; uncertainties of
estimates of their size or composition; uncertainties of projections related to
costs of production; the possibilities in delays in mining activities; changes
in plans with respect to exploration, development projects or capital
expenditures; and various other risks including those related to health, safety
and environmental matters. Readers are referred to the documents filed by the
Company on SEDAR.
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For further information:
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| Western Coal Corp. | Buchanan | Cenkos |
| David Jan | Communications | Securities |
| Head of Investor | Bobby Morse / | Nominated |
| Relations | Katharine Sutton | Advisor and |
| +1 604 694 2891 | +44 (0)207 466 5000 | Broker |
| David.jan@westerncoal.com | bobbym@buchanan.uk.com | Nick Wells/ |
| | | Ivonne Cantu / |
| | | +44 207 397 8900 |
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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