What’s behind $240m coal takeover
Imagine a phone book-sized document landing on your desk and telling you to do nothing.
That's essentially what Stanmore Coal lobbed yesterday to its shareholders, who have been urged to reject a low-ball $239 million takeover offer.
The 336-page "Target Statement'' from the Brisbane-based outfit reiterated its key objections outlined last month when Indonesian coal group Golden Energy and Resources made an unsolicited 95 cents per share cash bid.
Stanmore's independent expert's report, drafted by the bean counters at BDO, says the fair value is actually between $1.48 and $1.90. Do the maths and that would make the company worth $347 million to $480 million.
So it came as no surprise that BDO concluded the Golden Energy offer was "not fair and not reasonable'' and the Stanmore board has unanimously recommended investors reject the conditional offer.
Don't be surprised if Golden sweetens its opportunistic offer, especially since it has already forked out more than $47 million for a 19.9 per cent stake in Stanmore.
It's also entirely plausible that another party will enter the fray and kick-off a bidding war.
Indeed, Stanmore boss Dan Clifford (illustrated) told City Beat yesterday that he thinks that's a distinct possibility since the company's initial knock back of the offer has been "completely vindicated'' by BDO.
"That's now out in the public arena so I imagine that would attract attention,'' Clifford said.
Stanmore has also attracted attention in the past, most recently in 2015 when it paid just $1 (yes, a single dollar!) at the bottom of the cycle to acquire Vale's Isaac Plains coking coal mine in the Bowen Basin.
The company has expanded the operations since then and reported a net profit of nearly $6 million in the last financial year. It has forecast underlying pre-tax earnings of between $130 million and $150 million this year.
Stanmore's share price spiked up to $1.035 after the Golden offer lobbed but has eased off since then, closing yesterday at $1.