Alpha Natural Resources Inc. (ANR), the second-largest U.S. coal producer, agreed to sell a 50 percent stake in a shale-gas joint venture to Rice Energy for $300 million in cash and shares.
Alpha will get $100 million in cash and $200 million of stock in closely held Rice, which plans to hold an initial public offering, Bristol, Virginia-based Alpha said today in a statement. As part of the deal, Alpha Chairman and Chief Executive Officer Kevin Crutchfield will be entitled to join Rice’s board.
Alpha and Rice entered into the 50-50 venture in 2010 to develop a portion of Alpha’s natural gas holdings in the Marcellus shale formation in Pennsylvania.
“The transfer helps the company to crystallize the value of these assets sooner than expected,” Lucas Pipes, a New York-based analyst at Brean Capital LLC, said today in a note, referring to Alpha. He has a hold rating on Alpha’s shares.
Alpha rose 6.7 percent to $7.01 at 9:55 a.m. in New York.
Rice, a shale gas exploration and production company, announced plans to sell shares to the public in a separate statement today.
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