The battle for Manalta Coal appears to be winding down following the company’s recommendation that unit-holders accept a revised bid from rival Luscar Coal.
Under advisement from RBC Dominion Securities and JP Morgan Securities, Manalta directors voted unanimously in favor of the new $589-million deal, which outlines an increased unit exchange ratio of 0.4 Luscar Coal units for one Manalta Coal instalment receipt, up from the original offer of 0.335 of a Luscar unit per Manalta receipt. In addition, Manalta has scrapped a proposed $276-million recapitalization plan that was designed to keep unit-holders on side during the protracted takeover bid. As a result, Luscar will pay, on behalf of Manalta unit-holders, a $4 instalment per outstanding receipt.
Says Manalta Chairman Theodore Hanlon: “It has always been common ground that combining these two operations would recognize significant savings for the benefit of all.”
According to Luscar, an evaluation of the proposed merger indicates that the new company will save $90 million over the first five years and $24 million per year thereafter.
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