If concluded, the combination proposal contemplates a plan of arrangement transaction whereby Western shareholders would receive a mixture of cash and Walter shares valued at $11.50 per Western share.
The combination would create one of the world’s largest pure-play publicly-traded producers of metallurgical coal with geographically diversified assets in Canada, the US and the UK and with strong market positions in Asia, South America, North America and Europe.
The combined company would have synergistic technical expertise in both open- pit and underground coal mining, and its market capitalisation along with enhanced financial strength would position it well for implementing various strategic growth plans.
The proposed value represents a premium of 55.8% to Western’s closing price yesterday of $7.38 on the Toronto Stock Exchange.
The proposal values Western’s equity at $3.3bn, based on Western’s 291.1 million common shares outstanding on a fully diluted basis, excluding common shares held by wholly-owned subsidiaries of the company.
Western expects to produce 6.1 million tonnes of coal for the fiscal year ending 31 March 2011, growing to 10 million tonnes for fiscal 2013.
