Today Xstrata Coal, a unit of Xstrata, made an all-cash $960 million bid for thermal coal producer Resource Pacific Holdings (RSP), competing with an offer from rival coal miner New Hope last month.
Resource Pacific has recommended that its shareholders take no action yet on the $2.85 per share takeover offer, saying that the company would consider the offer and make a formal recommendation in due course.
"We see a lot of value in our Newpac, Hunter Valley mine and any shareholder who exits now will lose the opportunity to benefit from this value by remaining a shareholder or accepting any higher offer that may emerge," said managing director of Resource Pacific, Paul Jury.
Newpac is an underground semi-soft coking coal and thermal coal mine in NSW which is run and operated by Resource Pacific.
Mr Jury said Resource Pacific is on the cusp of unlocking substantial value for its shareholders and is currently embarking on a second phase of growth at the Newpac mine to increase output to 8 million tonnes per annum by 2010.
"It is clear Xstrata understands that Newpac, which is the last remaining high quality semisoft coking coal resource in New South Wales, is a very valuable asset," Mr Jury said.
"The issue our board will consider is whether Xstrata's bid takes this value into account and provides adequate compensation to shareholders at a time when export coal demand and prices are at record levels and forecast to rise further."
The Xstrata bid outshines the offer from New Hope Corp which is worth about $2.40 per Resource Pacific share or around $808 million.
"This is the third unsolicited attempt to seize control of Resource Pacific and deprive shareholders of its future value," Mr Jury said.
"These attempts clearly demonstrate growing appreciation of the high quality of Newpac and its significant value."
Resource pacific rose by 3.44% today amid market speculation of yet another takeover offer.
The stock closed up by 10 cents at $3.01.
