Investing.com -- New Hope Corp (ASX:NHC) shares rose to a near one-month high on Monday after the Australian coal producer agreed to acquire the remaining stake in Malabar Resources it does not already own, securing full control of the Maxwell underground mine and expanding its production base.
Shares gained 4.6% to A$6.11, their highest level since September 21, while the benchmark S&P/ASX 200 was last up 0.2%.
Under the binding agreement, Malabar shareholders other than New Hope will receive 0.5 New Hope shares for each share held, implying A$2.92 per Malabar share based on New Hope's October 16 closing price of A$5.84.
The transaction values Malabar's equity at about A$1.8 billion on a fully diluted basis, with an enterprise value of about A$2.4 billion.
New Hope already holds about 26% of Malabar, an unlisted public company. The deal would require the issuance of 227.8 million New Hope shares, leaving existing New Hope shareholders with about 79% of the combined group and other Malabar shareholders with the remaining 21%.
The acquisition would give New Hope full ownership of Malabar's Maxwell mine near Muswellbrook in New South Wales' Upper Hunter region, close to New Hope's existing Bengalla operation.
Maxwell began longwall production in April and is targeting up to 5.5 million tonnes of saleable coal a year once its longwall operation is expanded.
The combined group would have a pro forma market capitalisation of about A$6.3 billion and a pathway to19 million tonnes of annual saleable production.
The boards of both companies support the transaction, with Malabar's board unanimously recommending the scheme, subject to customary qualifications and an independent expert concluding it is in shareholders' best interests.
Completion is expected by March 2027, subject to Malabar shareholder approval, court approval and regulatory clearances, including from Japan's Fair Trade Commission.
Original Article
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