NEW HOPE BIDS FOR NEC
Written on the 11 October 2010
NEW Hope Corporation Limited (NHC) has announced a $192.6 million takeover bid for coal miner Northern Energy Corporation Limited (NEC).
The $1.50 per share all-cash off-market offer is 42.9 per cent higher than NEC’s closing price of $1.05 on October 6, before a speculative surge and trading halt yesterday at $1.115 per share.
New Hope chairman Robert Milner, says the proposition will allow greater access to capital for NEC, which is well-needed given the company’s project plans.
“Northern Energy is a coal exploration company and requires significant amounts of additional capital to develop its project pipeline. New Hope has a strong balance sheet and the capacity to develop NEC’s projects from existing cash reserves,” he says.
“For New Hope, the proposed acquisition of NEC enables New Hope to gain further exposure to the metallurgical coal market as well as providing an additional thermal coal development pipeline.
“Our offer also provides certainty of value in what has been a volatile period for NEC shareholders.”
Northern Energy chief operating officer Mark Turner would not comment when contacted by brisbanebusinessnews.com.au, but a spokesperson said the company is considering the proposal.