The serious contenders for Anglo American’s $US5bn steelmaking coal portfolio are now getting into the finer details of what’s on offer from the London-listed mining giant, and are gearing up for their final offers in November.
The final binding offers are due in the week starting November 11.
Until then, there’s plenty of work to do for what’s considered one of the best coking coal mine portfolios in the world.
Firstly, the suitors get the opportunity to ask management questions in the coming days, and should they need one-on-one meetings about the offering, those would be provided.
Then there’s visits to the Queensland mines taking place and negotiations around the transaction documents.
Management presentations will also get underway next month along with site visits.
It comes after first round offers for the portfolio were received on September 9.
As earlier reported by DataRoom, Yancoal, Glencore and Stanmore Coal are considered the most serious contenders through to the second round, with a lot of chatter than the Swiss trading company Glencore is particularly motivated in the competition.
Stanmore is accompanied in its bid by Matt Latimore’s M Resources and Golden Energy, but it’s Yancoal and Glencore who are expected to go head to head.
Adani also put in an offer, but the Indian suitor is hard to read, while there’s at least one Japanese trader like Marubeni that has pre-emptive rights on at least one of the assets.
Coronado Global Resources, BHP and Whitehaven are not bidding, while Peabody Energy is not considered to have serious interest.
The understanding is suitors may submit offers for single assets as well as the portfolio as a whole, and then the entire offering would be assessed.
Anglo American’s advisers, Goldman Sachs and Morgan Stanley, have apparently cast the net wide when it comes to finding a buyer for the portfolio, with talk of 24 parties signing nondisclosure agreements to access confidential information about the portfolio before the race narrowed.
The Australian-listed Yancoal, which is 62 per cent owned by Chinese state-owned Yankuang Energy, has suspended dividends to provide more firepower for mergers and acquisitions.
It is known to be keen and is working with advisers Citic CLSA and RBC.
Stanmore Coal is also thought to be interested in at least the Grosvenor and Moranbah North assets, which were next to its Poitrel mine.
Glencore is self advised.
Earlier, price expectations were about $US5bn ($7.5bn), but this was before a fire broke out at the Grosvenor mine at Moranbah, about 1000km northwest of Brisbane, causing its closure, and now it’s thought to be worth about $US4bn.
On offer for the suitors which have been assessing the opportunity in a data room are Anglo American’s Capcoal and Dawson assets, and its most attractive mines, Moranbah North and Grosvenor.
Should the portfolio be split up, the major players could pick up Moranbah North and Grosevnor, Jellinbah could go to co-owners while others take Capcoal and Dawson.
The price of coking coal futures are at $US186 per tonne after falling from about $US300 at the start of the year, which will play a part with suitors working out what to pay.
For 2023, Anglo American’s steelmaking coal operations generated 15 million tonnes of coal, equating to $1.3bn of earnings before interest, tax, depreciation and amortisation.
It is targeting production of about 20 million tonnes per annum at a unit cost of about $US100 per tonne by 2026.
Anglo American announced a company break-up while fending off BHP’s advances, leading to some of the best coal mines in the world — which sat within its portfolio — being put on the market.
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