PERTH (miningweekly.com) – South Africa-focused coal miner Universal Coal has maintained its advice that shareholders not respond to an unsolicited offer from fellow-listed TerraCom, after the suitor on Wednesday lodged a formal offer document.
TerraCom on Wednesday confirmed its offer for 33.5c a share for each of the Universal shares held, consisting of 10c in cash and 0.6026 new TerraCom shares.
“TerraCom is pleased to provide the opportunity for Universal security holders to consider the offer. TerraCom believes in the benefits of a combined entity in terms of scale and exposure to a portfolio of successful operating and geographically diverse coal production assets, and continues to hold the view that the takeover is in the best interest of all security holders,” said TerraCom deputy chairperson Craig Wallace.
“Despite recent negative representations by Universal in relation to a number of its institutional investors, TerraCom values all Universal security holders, including all of the parties that signed irrevocable undertakings in relation to the offer.”
Universal has meanwhile urged shareholders not to take any action, saying that based on the closing price of TerraCom shares on Tuesday, the unsolicited offer represented only a premium of 13.4% to Universal’s last closing price on the same day.
Universal will undertake a review of the offer document, before making a recommendation to shareholders.