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US based companies First Reserve and Alpha Natural Resources mull $2.75 billion buyout of Australian mining firm Whitehaven Coal::

Reports emerged Monday that two US based companies are mulling a possible $2.75 billion worth investment in the takeover of the Australian mining firm, Whitehaven Natural Resources. The two firms, First Reserve and Alpha Natural Resources, are said to be currently considering the buyout firm, coming after confirmations from the Australian miner that it had an open data room for prospective suitors for quite some time.

The Newspaper reports carrying the revelations would not however verify the sources, but rather indicated that the Australian firm had for long sought potential investments and might be gearing for a deal.  The reports come amidst an impressive performance by Whitehaven shares, increasing by 5.2% to peak at a record high of A$6.45. That subsequently valued the Australian firm at about A$3.15 billion. The prospective firms are believed to be eyeing Whitehaven for its high quality thermal and coaking coal.

A few days ago, Whitehaven reported that it was in talks with some third parties over potential deals but did not disclose the parties. Further more, the company did not reveal the details of the deals, whether it was a takeover or a stake purchase in its mines. In a statement issued by the Australian miner last week, it had confirmed that it had a data room open for a long period of time for which it had purposed for potential transactions.

The speculative reports over deal further said the two US based firms were seeking support from the AMCI group, a Whitehaven shareholder. The AMCI group is Australia’s second largest shareholder in Whitehaven with 15% shareholding. The American firms are seeking its support for the purchase and then subsequently sale some of its parts to Alpha, another miner that operates in Wyoming and eastern United States.

When reached for comment, a Whitehaven spokesperson declined to issue a statement reiterating that it was company policy not to comment on conjecture. Even so, the US based private equity firm, First Reserve currently owns a 27% stake in Whitehaven. Last week, First Reserve’s stake increased by over 12% upon conjecture that it may be a takeover prospective.

On the other hand, First Resrve and AMCI currently have a joint venture private equity fund in Australia. No comments were forthcoming from the AMCI offices in Australia nor from Whitehaven or Alpha Natural Resources. However, the reports further indicated that the investment proposal for the takeover is yet to fully develop into a formal offer and there might be no official bid in the immediate future.

9 Aug 2010.