UPDATE: Aston Resources To Proceed With A$1.5 Billion IPO - Source
July 29 2010 - 2:44AM
Dow Jones News
Aston Resources Ltd. is expected to begin a global bookbuild
Tuesday or Wednesday for an initial public offering of shares that
will value the coal miner around A$1.5 billion, a person familiar
with the matter said Thursday, now that two cornerstone investors
for the deal have been secured.
Presumably, the float is being timed to capitalize on strong
demand for Australian coal assets, which have attracted takeover
offers together worth more than US$6 billion so far this year. It's
the first major IPO to test the Australian market since a few
disappointing floats late last year left the primary market all but
shut.
Asian commodities traders Noble Group Ltd. (N21.SG) and Itochu
Corp. (ITOCY) have agreed to become cornerstone investors in Aston,
the person said. Combined, the pair will take an up to A$100
million stake in Aston. Mining magnate Nathan Tinkler plans to sell
just 15%-20% of his position in Aston, the person said, leaving a
float of about A$400 million in size to be marketed to
investors.
Post-IPO, Tinkler will have a roughly 40% stake in the
Brisbane-based company. Hong Kong-based investor Noonday Asset
Management, which currently holds roughly 37% of Aston, will hold
27%.
Tinkler, the owner of Aston, bought the Maules Creek coal
deposit for US$480 million in February. Maules Creek, located in
the Australian state of New South Wales, which will produce
metallurgical and thermal coal, is Aston's key asset.
During Aston's negotiations for a cornerstone investor,
Anglo-Swiss mining giant Xstrata PLC (XTA.LN) and U.S. coal miner
Peabody Energy Corp. (BTU) were both interested in buying Aston,
the person familiar with the deal said, but Aston's management
decided to grant stakes to cornerstone investors instead of opting
for an outright sale. Xstrata and Peabody could be interested in
taking shares in the IPO, the person said.
The interest shows that Xstrata and Peabody are still sniffing
around the Australian market in the wake of the aborted takeover of
MacArthur Coal Ltd. (MCC.AU).
Earlier this year, a takeover battle for MacArthur turned into a
bidding war attracting interest from Peabody, Xstrata and New Hope
Corp.(NHC.AU). But the proposed resource super profits tax threw
water on that deal and all of the potential bidders walked
away.
Since then the proposed tax has been blunted and Thai miner
Banpu PCL (BANPU.TH) this month bid for Centennial Coal Co.
(CEY.AU). Last year, China's Yanzhou bought coal miner Felix
Resources Ltd. in the biggest Chinese takeover of an Australian
company for A$3.54 billion.
Data from Dealogic released earlier this month shows that US$6.6
billion in Australian coal company takeover offers made in the
January-June period is higher than the total value of transactions
completed in any of the previous four years.
IPO activity, however, has stalled.
Most recently, Bilfinger Berger AG (GBF.XE) was marketing its
Australian construction business to raise up to A$1.39 billion but
that deal, which was being viewed as a bellwether for the nation's
IPO market, was pulled earlier this month because of adverse market
conditions.
The last large IPO, for department store Myer Group Holdings,
(MYR.AU), is currently trading 16% below its offer price compared
to a 2.5% fall in the broader market since Myer listed in
November.
-By Cynthia Koons and Ross Kelly, Dow Jones Newswires;
61-2-8272-4691; cynthia.koons@dowjones.com
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