Two multinational mining companies verified widespread rumours about them potentially consolidating.
Coronado Global Resources recently confirmed it is trying to merge operations with Peabody Energy Corporation.
“Coronado confirms that it is in confidential discussions with Peabody regarding a potential combination transaction. However, as no transaction has been agreed and the discussions are ongoing, Coronado is not yet in a position to provide further details,” the company said in a public statement.
AMR understands one proposal is for Peabody to purchase Coronado. This would allow Elliott Management, one of the target company’s private equity holders that is keen for an exit, to sell its near 20 per cent stake. It would also deliver new management at Coronado’s Curragh Coal Mine, 209km west of Rockhampton.
Majority shareholder Energy and Minerals Group (EMG) supports the deal because it would reduce exposure to Coronado, according to News Limited. EMG owns about half of all Coronado shares.
“There is no certainty that the discussions will lead to a transaction. Coronado will keep the market informed in accordance with its continuous disclosure obligations,” a Coronado spokesperson said.
Peabody and Coronado are widely expected to make an announcement during their third quarter earnings updates.
“Third-party reports of earnings for the quarter ended September 30, 2022 are false as the company has not yet issued earnings for this period. The company will report earnings in the coming weeks, consistent with past practice,” Peabody said in a public statement.
Goldman Sachs, Bell Potter, Credit Suisse and UBS Advisers are advising on the proposed merger according to the media outlet.
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