Anglo American weighs $120 a share takeover of Walter Energy: report

Diversified miner, Anglo American is weighing a $120 per share takeover of Walter Energy, the largest coking coal producer in the US, with mining giant BHP Billiton likely to enter the fray, The Times yesterday said in its daily market report, without disclosing its source.

The news sent the stock price of Walter Energy surging by more than 21 per cent yesterday.

In the report, The Times said that London-based Anglo American could pitch an offer price at $120 per share for Walter Energy, a 60-per cent premium to its Tuesday's closing share price of $74.99, valuing the Alabama-based coal miner at around $7.49 billion.

The paper also said that Anglo American, which has already lined up financing for the bid, could hike its potential offer to $150, if required, which would represent a massive premium of 100 per cent.

The report comes a month after Bloomberg, citing two people with knowledge of the matter, said that Anglo American is planning to counter the $5.02-billion joint takeover bid of Australia's second-biggest coal miner  Macarthur Coal by Peabody Energy and ArcelorMittal.

Anglo American, which operates five hard and semi-soft coking coals and thermal coal mines in Australia's Queensland and one in New South Wales, has not made a move for Macarthur despite its board backing Peabody-ArcelorMittal's revised bid late last month (See: Macarthur Coal backs Peabody, ArcelorMittal's revised bid).