Blumont Scraps $117 Million Cokal Takeover After Stock PlungesPratish Narayanan and David Stringer
Blumont Group Ltd., which invests in minerals and energy, scrapped a deal to buy Australia’s Cokal Ltd. for S$146 million ($117 million) after shares of the Singapore-based company plunged by a record yesterday.
Blumont slumped 56 percent, the biggest drop since it began trading in June 2000, before being suspended. The stock move “materially and adversely affected the commercial terms discussed with Cokal,” it said in a filing to the Singapore Exchange after trading hours yesterday.
As many as 72.2 million new shares at S$2.02 apiece will be issued as part of the proposed transaction, Blumont said in a statement earlier yesterday, without naming the target company. It named Cokal, an explorer with coal projects in Indonesia, in the filing that announced the termination of the deal.
Blumont said this week it has held talks with 20 potential takeover targets or partners since December. The company agreed last month to invest A$116 million ($109 million) in Australia’s Discovery Metals Ltd. in a deal that could give it control of the copper producer.
The company sees an “unprecedented opportunity resulting from the recent severe impairment of asset prices in the mineral resources sector,” Blumont said in an Oct. 2 statement.
Cokal requested a trading halt in Australia until Oct. 8 pending an announcement on a takeover, the Brisbane, Australia-based company said yesterday in a separate statement. Blumont holds a 9.7 percent stake in Cokal, according to data compiled by Bloomberg.
Blumont’s target had a “total comprehensive” loss of about S$7.9 million in the year ended June 30, the company said in its statement. Cokal had a net loss of A$6.7 million in the period, according to data compiled by Bloomberg.
Trading in Blumont, the biggest gainer in Singapore in the last 12 months, was halted along with commodity investors LionGold Corp Ltd. and Asiasons Capital Ltd. by the Singapore Exchange as it requested explanations for large share price declines.
Asiasons, which last month bought a stake in U.S.-based oil and gas producer Black Elk Energy Offshore Operations LLC, plunged 61 percent yesterday. There are “malicious market rumors” that the Monetary Authority of Singapore sent a team to investigate the company, Asiasons said in response to an SGX query.
LionGold, which said last month it was in talks to buy as many as three gold mining assets, slumped 42 percent. The company is in advanced negotiations to buy a stake in one of the targets, which is listed in three foreign stock exchanges, LionGold said in an exchange filing yesterday, without naming the target.