Takeover offer drives Universal shares as coal demand continues to beat expectations
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A consortium of investors has made a takeover offer for thriving mid-tier coal miner Universal Coal, as global demand for both thermal and metallurgical coal remains buoyant.
Universal Coal shares were up 8 per cent to 32c just after midday today — and have put on 16 per cent since last week
The takeover bid is led by private entity Ata Resources, which has offered 35c for each Universal (ASX:UNV) share.
If accepted, the offer could see Universal de-listed from the ASX.
The offer would boost the market cap of South Africa-focused Universal from about $154.1m to $182.8m.
Universal said the offer was a response to the recent rise in the price and traded volumes of its shares (or to be exact its CHESS Depository Interests or CDIs — a type of security used by the ASX to allow international companies to trade on the local market).
Universal’s July peak of 33c represented its highest share price since August 2011.
Major shareholder Coal Development Holdings — which holds about 27.5 per cent of Universal — will vote in favour of the takeover and subsequent delisting.
“The independent directors will meet as soon as reasonably practicable to fully consider the details,” Universal said in a statement.
“In the meantime, the Independent Directors recommend that Universal’s shareholders take no action and make no decisions” until they consider the offer.
Universal Coal – like many of its coal-focused peers – achieved record results for the 2018 financial year, with a key highlight being operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $72 million.