Cashed-up thermal coal miner New Hope Corporation has invited formal takeover bids after receiving several preliminary offers, with one analyst tipping Xstrata as a potential suitor.
New Hope on Wednesday said it had received preliminary and incomplete proposals from third parties regarding potential takeovers.
The board believed it was appropriate to undertake a formal process to determine whether a proposal was available at a price and on terms that were in the best interests of shareholders, New Hope said.
Selected parties would be invited to submit proposals.
“It is the duty of the board to consider legitimate opportunities for the company which may be in the best interests of all shareholders,” New Hope chairman Robert Millner said in a statement.
Morningstar analyst Matthew Hodge said Swiss mining giant Xstrata was New Hope’s most likely suitor.
“It would probably have interest to Xstrata,” Mr Hodge told AAP.
“I think the second tier global miners would probably have a look.”
Mr Hodge said the success of any proposal hinged on its acceptance by Washington H Soul Pattinson, which is chaired by Mr Millner and owns about 60 per cent of New Hope.
“It’s up to them … and I don’t think they’re going to sell other shareholders out if the price isn’t right,” Mr Hodge said.
Shares in New Hope soared 81 cents, or 15.3 per cent, to a record close or $6.10.
Washington H Soul Pattinson shares also gained, rising 99 cents, or 7.8 per cent, to $13.64, the highest in about a year and a half.
Mr Hodge said New Hope was one of the few coal miners that had a wholly owned port facility, in Brisbane.
“They’ve managed to get around some of the infrastructure issues that have plagued some of the other companies,” he said.
It also had a good track record, a long mine life at its low-cost and expandable Acland operation in Queensland, and an “immaculate” balance sheet with $1.5 billion in cash and no debt as of August 31.
New Hope last month pledged to double output over the next five to seven years, after reporting a full year profit of $503.1 million.
Mr Hodge said there were few takeover targets left in the tightly held Australian coal market, with Whitehaven Coal being a notable exception.
Like New Hope, Whitehaven in October last year began a formal sale process following several informal approaches from parties interested in making a takeover bid, but took itself off the market in May, saying none of the proposals were high enough.
Mr Hodge said Nathan Tinkler’s Aston Resources could also be a target as it continued to sell off stakes in its Maules Creek project in NSW to help finance the development, with production yet to commence.
New Hope said the process was expected to take several months, and may or may not result in a proposal being made or recommended by the board.
