Last week, Yankuang Energy announced it was thinking over a $1.8 billion bid to acquire the remaining stake in Yancoal. Yankuang Energy said in documents filed with the Hong Kong Exchange on May 25 that it was mulling a $US3.60 a share bid for Yancoal, financed through new convertible bonds. Yankuang currently owns 62.3% of Yancoal.
Yancoal confirmed it received an unsigned, non-binding expression of interest in relation to the potential transaction on April 29. “There is no certainty that the potential transaction will proceed,” the company said. It advised Yancoal shareholders to not take any action.
The Yancoal Board appointed an Independent Board Committee (IBC) to evaluate and respond to the transaction and, to the extent required, to make a recommendation to the independent shareholders of Yancoal.
Since its establishment, the IBC said it has corresponded with Yankuang Energy seeking clarifications and additional information. This includes “how Yankuang Energy has assessed the value of Yancoal noting that the potential transaction is at a discount to the prevailing trading prices of Yancoal shares on ASX and the Hong Kong Stock Exchange,” the company said.
The IBC said the potential consideration of US$3.60 (equivalent to HK$28.26) per Yancoal share reflects a discount of approximately 14.49% to the latest closing price of HK$33.05 (US$4.21) per Yancoal share as quoted on the Hong Kong Stock Exchange on May 25.
Yancoal said IBC will continue to evaluate the potential transaction in light of the responses and clarifications provided by Yankuang Energy and will update shareholders in due course.