New Hope In Scrip Bid For Nsw Miner

The Age

Thursday September 27, 2007

Jamie Freed, Sydney

THE frenzied pace of coal industry consolidation continues, with Queensland miner New Hope revealing plans to launch a $591 million hostile scrip bid for NSW miner Resource Pacific.

New Hope, controlled by Washington H. Soul Pattinson, decided to make the surprise bid months after merger talks failed.

Resource Pacific shares rocketed 28 per cent to close 55.5? higher at $2.50 yesterday, 5? above New Hope's implied bid price given market expectations a rival suitor could emerge.

This year, Resource Pacific had held talks with NSW miner Gloucester Coal about a potential merger. But after Xstrata launched its failed $391 million bid for Gloucester, the talks fell over. Instead, Xstrata last week agreed to buy two prized assets from troubled miner Centennial Coal for about $1 billion.

Resource Pacific managing director Paul Jury was in Britain and unavailable for comment.

After the proposed Xstrata-Gloucester merger failed in July, Mr Jury said he was willing to resume talks with Gloucester.

But it's believed that Gloucester may have lost interest in Resource Pacific because the new longwall at its Newpac mine in the Upper Hunter Valley looks like it could be tricky to operate.

Resource Pacific, which mines semi-soft coking and thermal coal, has been looking to buy or merge with another company to lower its risk profile, given it is a one-mine company. This month, Resource Pacific said it would delay the extraction of Newpac's second longwall block by a month due to difficulties with new equipment.

New Hope, which has a market value of $2 billion but is relatively illiquid, operates two open-cut mines in Queensland. It released a statement to the stock exchange yesterday noting plans to offer 1.04 of its shares for each Resource Pacific share, conditional on gaining control of 50.1 per cent of the NSW miner.

Resource Pacific advised shareholders to take no action, but noted the timing of the bid was opportunistic and it had retained Citigroup and Allens Arthur Robinson to provide advice related to the offer.

A Resource Pacific spokesman said it had held talks with many companies, including New Hope, but had not solicited offers.

© 2007 The Age

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