Tallahassee, FL 11/1/11 (StreetBeat) -- Canada's Grande Cache Coal (Toronto: GCE.TO) accepted a C$1 billion ($1 billion) takeover offer on Monday from two Asian traders aiming to cash in on rising demand from China's steelmakers.Winsway Coking Coal - an importer of coking coal into China -- and Marubeni Corp - a Japanese trading house - will pay C$10 cash for each Grande Cache share, a 70 percent premium to its Oct. 28 close.
The Calgary, Alberta-based miner owns leases that contain more than 300 million tonnes of coal in the Smoky River coal field, located in the Western Canadian province of Alberta. The offer is the latest in a flurry of deals within the global coal industry that includes Peabody Energy's $5 billion offer to buy Australia's Macarthur Coal.
Miners are scrambling to bolster their coal reserves in anticipation of rising demand from both China and India even though uncertainty still surrounds the broad economic outlook. Producers of thermal coal used in power plants, as well as coking or metallurgical coal, used to make steel, have become acquisition targets.
Grande Cache, the most active stock on the TSX on Monday, was also the biggest gainer, up C$3.94 to C$9.81 in afternoon trading. "We believe the arrangement is a compelling transaction for Grande Cache Coal's shareholders and recognizes our highly attractive mining operation," Grande Cache Chief Executive Robert Stan said in a statement. The Calgary, Alberta-based coking coal miner said its board unanimously approved the deal and believes that it is in the best interest of shareholders. Directors and officers of Grande Cache have agreed to tender their shares in favor of the deal.
The proposed bid lifted shares of other Canadian-listed coal miners. Shares of Cline Mining and Southgobi rose 21 percent and 5 percent, respectively.
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