UK Coal poised to reject approach from Austrian investor Meinladmin
UK Coal, Britain’s biggest coal supplier, is understood to be planning to dismiss an informal approach from Meinl, an Austrian investor, to buy the company’s coal and power generation units.
UK Coal received a letter last week from the board of Meinl saying it was interested in purchasing the company’s operations, excluding its property interests, and proposed a meeting with management or its advisers in early 2008, but Meinl did not indicate what it might be prepared to pay.
UK Coal is understood to see its independent prospects as better than they have been for several years as it is decreasing its proportion of coal-supply contracts that are based on historical, and therefore below current market value, prices.
The revelation that its property assets might be worth more than previously thought has boosted its appeal to investors. Its share price has more than doubled over the past two years.
The value of the company’s land rose 36 per cent to Â£398m in the first half of 2007. That was the main reason pre-tax profit leapt to Â£40.6m (Â£16.7m), in spite of a decline in revenue from Â£193m to Â£146m in the six months to June 30, mainly because of a month-long shutdown at the Daw Mill mine after a fatal accident.
The company continues to benefit from rising coal prices and closures of unprofitable mines. It has also recently won the right to operate for another 10 years its Thoresby coal site.
Meinl has planned European energy acquisitions since June 2006. While registered in Jersey, it is listed on the Vienna stock exchange and has about Â£400m in assets under management.
Meinl and UK Coal de-clined to comment.