Australian coal miner Coronado Global Resources (ASX: CRN) is in possible takeover talks with Peabody Energy Corp, the big US / Australian coal miner and exporter regarding a potential “combination transaction”.
As of Tuesday’s close, Coronado had a market capitalisation of $3.26 billion ($US2.05 billion), while US-based Peabody was valued at $US3.9 billion (around $A6 billion).
Shares in both companies have risen sharply this year, as customers from Europe to Asia scramble for thermal coal in the aftermath of the European Union’s sanctions on gas and coal-rich Russia.
Coronado had held merger talks with US-based peer Arch Resources earlier this year, but that didn’t move into a deal.
Coronado, which owns coking coal mines in Virginia and West Virginia state, said no agreement had been reached with Peabody and it did not divulge any details on a potential deal.
Coronado also owns the old Curragh coking and thermal coal mine in Queensland (it used to be owned by Wesfarmers)
Peabody has coal mines in the US in the huge Powder River Basin and in Australia in NSW and Queensland. It produces coking and thermal coal for export from its Australian mines and thermal coal for its US domestic power station customers. Peabody is the 5th biggest coal miner in Australia.
Coronado shares jumped 8% on the news yesterday to $2.09. Peabody shares will react overnight Wednesday on Wall Street.
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An oddity yesterday from CSL Limited (ASX: CSL) – a guidance update that was both positive but also very, very short term in nature.
The fleeting nature of the update, delivered to the drug giant’s AGM in Melbourne- perhaps confused investors who marked the shares down 1.1% to $279.70 yesterday.
CSL’s CEO Paul Perreault told the meeting that so far in the early months of 2022-23, the company is performing in line with its guidance for the year to June 30.
Perreault told the meeting “I am pleased to reaffirm that: Revenue growth to be in the range of 7 to 11% over Financial Year 22 at constant currency, with net profit after tax expected to be approximately in the range of US$2.4 to US$2.5 billion at constant currency.
“On a like for like basis, this represents a growth of between 10 – 14%,” he said.
But he and analysts pointed out that this guidance excludes CSL Vifor earnings and costs associated with the acquisition, as well as non-recurring COVID vaccine contribution.
The CEO told the meeting CSL intends to provide a further update on its guidance, including CSL Vifor, later this month – in fact on October 17, thus making yesterday’s guidance update one of the shortest on record.
October 17 is when CSR has scheduled a day of investor briefings on the massive, $16.4 billion Vifor purchase and where and how it will contribute to CSL going forward.
Buried in the update though was a warning to the market that the drug giant was feeling the pain from the “challenges in the external cost environment, whether that be inflationary pressures, staffing constraints or the logistics and supply chain challenges.”
They are not alone and those comments might very well come to dominate thinking about the company’s performance in the December half year at least before any real boost from Vifor is felt in the revenue and P&L accounts.
The Vifor briefing and its contents will be vital in assessing the CSL share price heading into 2023.
It was such a big deal – the largest by CSL ever and the company has to be seen getting top notch returns from the investment.
CSL shares are down just under 4% so far in 2023 which relatively speaking means it has outperformed the ASX200 which is off more than 10%.
