- March 27, 2024
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Walter Energy bought Western Coal for $2.1 billion in cash plus 9 million shares of Walter Energy stock, creating the world's largest publicly-traded metallurgical coal producer.
In total, the deal valued Western at $3.3 billion. The terms of the deal are identical to those first proposed on Nov. 18 (see below). The CAD$11.50 per-share offer issued by Walter represents a 56% premium over Western Coal's closing share price of CAD$7.38 on the day before negotiations began.
Joe Leonard, interim CEO at Walter, called the merger "a transformative transaction at a time when global demand for metallurgical coal is surging."
From Nov. 18:
Walter Energy submitted a proposal to Western Coal Corp. to buy outstanding shares of the Canadian firm's stock for CAD$11.50 per share. The proposal would put Western Coal's value at USD$3.3 billion.
The two firms have already entered into an exclusivity agreement, and will work with each other to negotiate an acquisition deal.
Separately, Walter acquired 19.8% of Western Coal's outstanding shares from affiliates of Audley Capital Advisors LLP, a London-based hedge fund sponsor. Walter also paid $11.50 per share for that stake.
Walter CEO Joe Leonard says the combined company would become “the leading, publicly-traded 'pure-play' metallurgical coal producer in the world,” given both the sheer quantity and geographic diversity of its coal supply holdings.
Walter Energy reported $967 million in revenues in 2009. In the 12 months ended Mar. 31, Western Coal revenues were $439 million.