$6B Auction Hope Fizzles for Australian New Hope Miner; Shares Down
Shares of Australian coal miner New Hope Corp. plummeted to more than 10 percent to $5.11 on Thursday after plans to sell itself for more than $5 billion fizzled out.
The company told various media it failed to attract enough potential buyers due to the ongoing maddening economic crisis affecting the world today plus the tight credit markets.
New Hope Corp., with a market value of $4.5 billion, closed the five-month formal sales process on Thursday, after it halfheartedly put itself up for sale in October 2011 due to pressure from majority shareholder, Washington H Soul Pattinson and Co., which owns New Hope Corp. at 60 per cent.
That time, a number of interested takers approached New Hope Corp., including Indian conglomerates Tata Group and Aditya Birla, a Korean consortium and China's Shenhua Group among others, Reuters News said.
However, potentially interested parties ''never mentioned price... we didn't receive a definitive proposal,'' Robert Millner, billionaire owner of Queensland-based New Hope Corp., told BusinessDay.
"Discussions with those parties did not produce a definitive proposal which appropriately reflects New Hope's strategic value and growth prospects and therefore the process has been terminated," the company said in a statement to the ASX.
With $1.5 billion in cash in the bank, New Hope Corp. could still very much fund its own projects, "especially at this time when banks are not lending."
However, Mr Millner did not disregard the possibility of putting up the sale sign again ''if we receive an indicative offer, yes."
"With the conclusion of this process, the board and management will continue to focus on New Hope's strategy to grow the company and to create shareholder value," New Hope Corp. said in a statement.
The New Acland mine, New Hope Corp.'s open-cut project located west of Brisbane, produces thermal coal for power plants. New Hope Corp. sells 65 per cent of its coal overseas, with the remaining to the domestic market. The company also has another mine called Colton and some exploration assets.