The shadow boxing is over. Now the real Whitehaven fight begins
Whitehaven has emerged victorious in the heated battle for two BHP metallurgical coal mines, but can it duck a few haymakers from shareholders?
It was with a whimper, and not a bang, that Whitehaven sealed a deal that will double its size and position it at the front of the pack vying to be Australia's next true coal giant.
Amid a very public dispute with an institutional shareholder that has played out for weeks, a single line in BHP’s quarterly operations report anointed the company the preferred bidder for two of the Big Australian’s coveted Queensland mines.
Then this afternoon, after a trading halt, the company confirmed in an ASX announcement that it had struck a deal to acquire the assets for $US3.2 billion ($5 billion). As previously flagged by Capital Brief, the company won't use any equity to finance the deal, instead relying on its large cash reserves and a USD900 million bridge facility from Bank of America and Jefferies.
Whitehaven is now one step closer to to diversifying away from thermal coal and expanding into coking coal used for steel making — the latter seen as less financially risky. Thermal coal revenues are expected to make up just 30% of future revenues.
