NSW coal miner, Felix Resources appears set to receive a long-tipped, $3.5 billion-plus takeover bid from Yanzhou Coal Mining, in what would be the biggest Chinese deal in the Australian coal sector.
Felix yesterday suspended its shares from trading pending the outcome of negotiations on a change of control transaction, while in Hong Kong, where it’s listed, Yanzhou, also suspended its shares.
The Chinese miner is understood to be offering just under $20 a share, valuing Felix at about $3.7 billion.
Yanzhou has been in off-and-on talks with Felix about a takeover bid since last year. Executives were in Australia in June examining Felix’s mines.
In an announcement to the ASX, Felix said it expected to remain suspended from trading for five days while approval processes were undertaken by the counterparty.
Felix controls mines in Queensland and NSW, including the huge Moolarben open cut thermal coal mine under construction near Mudgee in central NSW.
Felix shares last traded at $16.90, having traded as high as $21 and as low as $4.81 in the last year.
On June 24 this year, Felix issued this statement to the ASX:
"Further to the press speculation contained in The Australian newspaper today, Felix advises that there has been no change to the position as stated in its announcement on 27 April 2009.
"In that announcement Felix noted that several discussions have been held over the past twelve months regarding a potential change of control transaction.
"However given the world financial environment it is unlikely these discussions will be concluded in the near term."
That forecast seems to have been a little off the mark, as it’s now almost 7 weeks later and there’s a deal in the offing.
The news has set other listed coal mining shares rising.
Queensland miner, Macarthur Coal (the world’s largest exporter of pulverised coal to the steel industry), saw its shares rise 35 cents or 4.5%, to $8.21 yesterday.
It’s controlled by Citic of China, Posco of South Korea and ArcelorMittal of Europe, the world’s biggest steelmaker.
And still in the steel industry, iron ore exporter, Fortescue Metals Group says it earned full year net profit of $609 million, turning around a loss recorded from the 2008 year.
The company said net profit for the June 30 year was $US508.04 million ($A609.45 million), compared to a loss of $US771.77 million previously.
Revenue rose to $US1.83 billion, from $US138.29 million, after production at its Cloudbreak mine in the Pilbara region in Western Australia ramped up during 2008-09, withstanding the sharp downturn in demand during the year and the loss of a number of shipments.
Despite that news in a statement to the ASX, FMG shares fell more than 5%, or 25 cents to $4.16.
Some analysts say there’s some unease about iron ore groups in the wake of continuing allegations against Rio Tinto of claims of ‘espionage’ by the Chinese government.
"The ramp up of operations continued during the year with the total amount of ore shipped being 27.3 million tonnes (Mt), which was derived from a total volume of ore mined of 31 Mt," it said in the ASX statement.
Fortescue’s second mine at Christmas Creek recently commenced operations with product being trucked to the Cloudbreak ore processing facility.
"Fortescue also maintains an aggressive exploration and metallurgical program which is progressively developing tenement areas outside of the current mining sites," it said.
"There were a number of operating milestones achieved during the year with over 1,100 train journeys from the Cloudbreak mine site to the Herb Elliott port site at Port Hedland with a current round trip cycle time now under 19 hours.
"Other highlights included a ship loading rate of 100,349 tonnes being achieved within a 12 hour shift period and a production rate through the ore processing facility at Cloudbreak of 129,008 tonnes achieved within a 24 hour period.
"On a financial side, Fortescue completed a share placement of 260 million shares for total consideration of US$452 million (A$645 million) to Hunan Valin Iron & Steel Company in April 2009," the company said.
Meanwhile, Macquarie Leisure Trust Group has joined other funds in the Macquarie orbit in taking the knife to asset values ahead of reporting results later in the month.
Macquarie Infrastructure, Macquarie CountryWide and Macquarie Infrastructure have hacked deeply into asset values in updates already this reporting season.
And like Macquarie Airports, Macquarie Leisure is saying goodbye to the parent in Macquarie Group and striking out on its own.
Macquarie Leisure (MLE) yesterday said it had cut the value of its portfolio by 9% to $620 million, to reflect the impact of the global financial crisis, rising capitalisation rates and falling property values across every sector.
The trust, which owns and operates the Dreamworld and WhiteWater World theme parks on the Gold Coast, bowling alley assets and marinas, said its total tangible assets had been valued at $620 million at June 30, down from $681 million previously.
Chairman Neil Balnaves said in the statement that "lower valuations reflected earnings trends and a general softening in cap rates reflective of current market conditions".
The Dreamworld and Wh
