Endocoal board backs $73.4 million takeover bid from Chinese
A Chinese-joint venture in Australia has made a USD$73.4 million takeover bid for Queensland's Endocoal (ASX:EOC).
The Wall Street Journal reports that U&D Mining Industry (Australia), a joint venture between China Yima Coal Group's Australian subsidiary Kunqian International Energy Co. and Brisbane's Daton Group Australia (ASX:DTG), made the offer of AUD0.38 per share at a 65.2% premium to the company's last traded price of AUD0.28 a share, and that the offer has been endorsed by the Endocoal board of directors.
In an official statement Endocal said that "Yima sees Australia as an important supplier of coal and pivotal to its international strategy. This transaction demonstrates the conviction of its strategy to establish its coal operations in Australia."
The deal is subject to a report from an independent expert, as well as regulatory approvals from authorities in both Australia and the People's Republic.
Australian coal miners have weathered a tough time this year due to plunging spots prices and dwindling demand from key export market China. A sizable royalty hike by the Queensland state government has also been cited by many as the chief reason behind widespread retrenchments, while tepid prices have been blamed for ongoing mine closures.
Endocoal shares leaped 39% to AUD$0.32 in Monday trading.