Cokal Slumps as Blumont Bid Affected by Stock Drop: Sydney MoverElisabeth Behrmann
Cokal Ltd., a coal mine developer, slumped by the most in more than four years in Sydney after takeover talks with Blumont Group Ltd. were affected by a record plunge in the buyer’s stock.
Cokal fell 20 percent to 18.5 cents at the close of trading, the biggest drop since September 2009. Blumont shares gained 58 percent to 20.5 Singapore cents as of 1:49 p.m. local time, after a two-day, 85 percent drop shaved S$4.9 billion ($3.9 billion) from its market value.
“The movement in the Blumont share price materially and adversely affected the commercial terms of the takeover proposal,” Cokal said in a statement. “Blumont and Cokal continue to believe in the strategic merit underpinning Blumont’s proposals, further discussions are now occurring to restructure the financing and potential takeover offer.”
Buying Cokal would give Blumont stakes in coking coal projects, including the BBM project in Indonesia scheduled to begin production next year. Cokal, which has plans to become a global coking coal miner, owns stakes in projects in Indonesia as well as joint ventures in Tanzania and Mozambique, according to the statement.
Blumont yesterday agreed to loan Cokal $8 million, it said in a statement. It would allow development work at Cokal’s projects to continue as the pair pursue talks about further investment in the Australian company.
Blumont named Alexander Molyneux as its new chairman, spurring a rebound in Blumont stock in Singapore trading after it plunged by a record yesterday. Molyneux is the former chief executive officer of SouthGobi Resources Ltd. He will buy 135 million Blumont shares and become chairman after the transaction is completed, the company said in a statement yesterday.