Whitehaven Coal ends bids talk, stocks plummet
Whitehaven (ASX:WHC), the Australian coal producer that put itself up for sale in October, announced today it had ended talks for a potential takeover transaction.
In October 2010, following numerous informal approaches to the company over several months, Whitehaven announced that it was commencing a formal process to enable selected interested parties to conduct due diligence and submit proposals for a potential corporate transaction with the company.
In February, Whitehaven advised that it had received a number of non-binding indicative proposals and a selected short-list of parties had been invited to complete detailed due diligence and submit binding proposals.
Then in April, the company advised that the formal process was reaching a conclusion with shortlisted parties having completed due diligence and submitted formal proposals.
However, following further negotiation of these proposals, the Whitehaven Board has now determined that no proposal is sufficiently attractive to warrant recommendation to shareholders, and the process has therefore been terminated.
With the conclusion of this process, the Whitehaven Board and management say they will continue to focus on developing the company's existing high quality coal assets and seeking new growth opportunities.
The news sent Whitehaven stocks to their biggest fall in more than two years. The coal producer, which has a market value of A$2.8 billion lost 11 percent to A$5.71 at 12:43 p.m. local time against an 1.1 percent fall in the benchmark AS&P/ASX 200 Index. This was its biggest drop since Nov. 6 2008 in Sydney trading.