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Coal
Gloucester Coal (ASX: GCL) halts trading on ASX for at least the whole day today.
Gloucester Coal’s parent, Noble Group, is willing to sell most of its 64.5% stake to Yanzhou Coal, reducing odds of competing bids, Australian Financial Review reports, citing unidentified source close to Noble.
* Noble is said to consider retaining cornerstone stake, wants marketing & trading rights over coal output from new entity, AFR says
* Analysts say shareholders may get cash and shares in Australian unit Yancoal, with Yanzhou to control 60%-70% of new co.: AFR
* Yanzhou is expected to pay at least $2b, Bloomberg reported previously; shares of Gloucester, Yanzhou, Noble are halted
Comment: It is not in Noble (N21)'s interest to sell its entire stake in GCL. GCL remains a strategic asset in Australia for Noble. Considering this situation, a likely outcome is Noble selling a stake in GCL to Yanzhou but retaining a cornerstone stake. This will put cash back on its balance sheet, book a profit from the sale as well as continue to enjoy the advantage of this asset.
Noble is still halted today
Sources: Bloomberg, Reuters, WSJ, The Business Times, Analyst Reports, Company Announcements
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