Walter Energy Is ‘Best Match’ for Western Coal, Audley Says

Walter Energy Inc., a southern Appalachia producer of steelmaking coal, is the “best match” for Canada’s Western Coal Corp., according to Julian Treger, managing partner of Audley Capital Advisors LLP. Treger spoke in a phone interview from London.

“There were several interested parties; some were coal, some were steel producers. They were very close and very keen to make a bid. They didn’t publicly make a competitive bid. Walter is the best match because there were a lot of synergies, geographically in terms of customers and management.

“It’s likely the other shareholders will follow in accepting Walter’s offer in due course. In the absence of another alternative, I don’t see why they wouldn’t approve.

“It will be very accretive to Walter earnings and its shares will reflect that. And Western shareholders can capture benefits by owning Walter shares. I expect every Western shareholder, including us, will opt for the Walter shares because the shares will be worth about C$12, more than the cash offer of C$11.50. But Walter offers only about 30 percent of the transaction as shares and the rest as cash, so we’ll likely end up with no more than 30 percent of our share.”

“The timetable for the whole deal to be completed is about three months.”

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