Gloucester Coal to buy two coal miners for $618 million

16 May 2011

Australian coal miner Gloucester Coal, which is 65-per cent-owned by commodity trader Noble Group, has agreed to buy Donaldson Coal Holdings and Monash Group for A$585 million ($618 million) including debt.

Gloucester plans to sell A$230 million in shares to fund the acquisitions.

Gloucester will buy Sydney-based Donaldson for $360 million in Gloucester shares and take on $225 million in debt as part of the acquisition. The shares will be sold at
A$9 a share to existing investors, which represnts a 9.1-per cent discount to Gloucester's last traded price.

Gloucester will also buy Monash Group from Ellemby Holdings Pty Limited for $30 million in cash, as well as a nominal number of new converting shares, subject to achievement of key milestones.

Separately, Gloucester has entered into new marketing arrangements with Noble, which will take effect if it is able to complete the proposed Donaldson acquisition.

Gloucester said that the proposed Donaldson acquisition is interconditional with the proposed Monash acquisition and is subject to various conditions, including Gloucester shareholder approval and Gloucester sourcing new debt facilities on acceptable terms to Gloucester of an amount not exceeding $500 million and approval from the Australian regulator.