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Report: Alpha Natural near deal for Massey Energy

Report: Alpha Natural near deal for Massey Energy

Alpha Natural Resources Inc. is nearing a deal to buy Massey Energy Co. for about $7 billion in cash and stock, according to a published report late Friday.
Under terms of the agreement still being worked out, Massey shareholders would receive about one Alpha share for each Massey share plus $10 per share in cash. That would value the company at about $68 per share, The Wall Street Journal said on its website, citing people familiar with the matter which it did not identify.
The per-share price would mark a 19 percent premium to Massey's closing price Friday of $57.23.
Massey is the nation's fourth-largest coal producer by revenue. It operates 19 mining complexes in Virginia, West Virginia and Kentucky. The Virginia-based company has struggled with two money-losing quarters since last spring's deadly explosion at its Upper Big Branch mine in West Virginia killed 29 men and prompted a regulatory crackdown that Massey blames for cutting production.
The explosion was the deadliest U.S. coal mine disaster in decades and the subject of criminal and civil investigations.
Massey Energy's longtime chief executive, Don Blankenship, retired last month. That removed the strongest advocate for remaining an independent company from Massey's board, and made it more likely that the company would agree to a takeover offer, analysts have said. Massey last month hired Perella Weinberg Partners LP and Cravath, Swaine & Moore LLP to advise it on strategic options for its business.
Recent reports have suggested that Massey is a possible takeover target for rivals such as Alpha Natural and global steel conglomerate ArcelorMittal SA. Virginia-based Alpha is the leading U.S. producer of metallurgical coal used to make steel, while ArcelorMittal already owns several metallurgical coal mines in Appalachia.
Earlier Friday, Massey rejected nearly every part of the federal government's theory on what caused the deadly explosion. The company doesn't believe that worn shearer bits, broken water sprayers or an excessive buildup of coal dust contributed to the blast.
Instead, Massey continues to argue there was a sudden inundation of natural gases from a crack in the floor that overwhelmed what it insists were good air flow and other controls that should have contained the blast. It acknowledged the shearing machine that cuts the coal may somehow have ignited the gas but said the company's own investigators haven't determined how. Massey won't issue its own report on the explosion until after state and federal investigators release theirs.


Updated : 2020-12-04 06:18 GMT+08:00