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Universal receives bid from another suitor

2nd November 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The share price of South Africa-focused coal miner Universal Coal surged on Monday after the company was approached with another takeover offer.

ASX-listed Universal on Monday told shareholders that its independent directors had received a written, confidential, nonbinding, indicative and conditional proposal concerning a second takeover offer to acquire all the shares in the company for A$0.25 each, along with certain convertible securities.

The new offer compared with the A$0.16 a share being offered by Universal shareholder IchorCoal.

In September, Universal also flagged a possible A$0.20 a share offer from an unnamed third party, which already had existing exposure in the South African coal mining industry.

Under the newly received proposal, certain eligible shareholders would be able to elect to receive the consideration for their shares in the alternative form of a nonconverting, secured loan note.

The loan notes would initially carry an interest rate of 12.68% a year and could be redeemed after 12 months. After that, the loan notes could be retained at the option of the note holders for an additional six months and would carry an interest rate of 15% a year for this additional period.

It was unlikely that the loan notes would be offered to Australian resident shareholders, other than certain professional and sophisticated investors which satisfied relevant criteria set out under the Australian Corporations Act.

Universal told shareholders the proposal provided the making of a formal offer, subject to the satisfaction of certain conditions, which included the unanimous recommendation of Universal directors, the formalising of financing arrangements by the suitor and the completion of a short due diligence, which was already ongoing.

Universal’s independent directors have already stated that they would support the new proposal, subject to the satisfaction of the preconditions, and were working with the new suitor to assist in the facilitation of a formal offer by late November.

Meanwhile, Universal had also written to the party that had in September expressed an interest in acquiring the coal company, advising that company that should a formal offer be forthcoming, the board of Universal was unlikely to recommend the offer to shareholders.

Instead, all efforts would now be focused on the A$0.25 a share offer.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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