Walter Energy ripe for takeover bids

Walter Energy Inc.'s shareholders, who lost almost $2 billion in three months on management turmoil and disappointing earnings, may still be rewarded with a $4 billion windfall if the coal producer is acquired.

Investor Audley Capital Advisors LLP says the southern Appalachia producer of steelmaking coal should explore a sale following CEO Keith Calder's resignation after three months on the job. Walter Energy, which this month closed its headquarters in Tampa, would fetch as much as $192 a share, or a 60% premium to its close July 21, based on the median earnings multiple paid in coal deals since 1998.

While the $12 billion price would mark the biggest takeover of a coal producer, Walter Energy makes twice as much profit per dollar of sales as the U.S. industry average, data compiled by Bloomberg show. With metallurgical coal trading near a record and the Birmingham, Ala.-based company's shares down 15% from an all-time high in April, Walter Energy may lure buyers from Alpha Natural Resources Inc. to Consol Energy Inc., according to Raymond James Financial Inc. It may also attract steelmaker Cia. Siderurgica Nacional SA, Davenport & Co.