21st Dec 2015 10:27
LONDON (Alliance News) - Coal of Africa PLC shares fell on Monday after lodging the offer document for its reverse takeover of Universal Coal PLC, which looks set to close in the second quarter of 2016.
Coal of Africa shares were trading down 7.2% to 2.44 pence per share on Monday morning.
Universal Coal has already recommended the offer made by Coal of Africa, and the pair have received approval from authorities in South Africa. Both companies need shareholders to approve the deal, and the offer will remain open until early March next year, suggesting the deal will not be formally closed until at least the second quarter of 2016.
So far, Coal of Africa has received irrevocable undertakings from shareholders of Universal Coal representing a 43.4% stake in Universal, whilst Coal of Africa shareholders holding a combined 62.6% stake in the company have also said they intend to vote in favour of the offer.
The offer was originally made back in November, with Coal of Africa hoping to gain some immediate production and cashflow whilst making some cost-saving synergies across the enlarged group.
Under the terms of the offer, Universal Coal shareholders will get AUD0.20 in cash and one new Coal of Africa share for each of their existing shares. The deal values Universal Coal at around AUD126.4 million and represents a 35% premium to Universal Coal's closing price on October 30, the day prior to the talks being entered into.
Universal Coal has around 505.7 million shares in issue, with Coal of Africa having 1.59 billion shares in issue. Following the deal, Coal of Africa's share capital will increase to just over 2.09 billion shares, suggesting Universal Coal shareholders would own just over a 25% stake in Coal of Africa.
The deal represents a reverse takeover under AIM rules.
By Joshua Warner; [email protected]; @JoshAlliance
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