Whitehaven Coal may be on the bench for the $US3bn ($4.5bn)-plus Anglo American coal sale process, but the understanding is it is positioning itself to line up for the $US3bn-plus Kestrel coal mine process when it comes up on offer.
That would see the $5.8bn Whitehaven go head-to-head with underbidders from the Anglo American Queensland coal asset sale, with the process to start hot on the heels of the Anglo American coal mine sale conclusion.
Bids for the Anglo American assets are due in the week starting November 11.
Shaping up to win the Anglo American contest, as earlier flagged by DataRoom, is the China-controlled, Australian listed Yancoal from a price perspective, but it all rests on whether it can secure Foreign Investment Review Board approval.
Should it miss out, Whitehaven will be competing with Yancoal for Kestrel.
But as it stands now, the more likely scenario is that the other Anglo American bidders are there, including Peabody Energy, which is known to be keen to buy more assets and usually uses Goldman Sachs as its adviser, Glencore and Stanmore Coal and its Indonesian backers.
Stanmore, close to Grant Samuel, is typically conservative on price, and has recently made a number of big-ticket acquisitions in the Australian coal sector.
Glencore is believed to be behind the pace on price in the Anglo American process, and may be there on standby should Yancoal not gain regulatory approval. Alternatively, shareholders in the Swiss trader may determine that the company is better off returning funds to its investors.
Whitehaven last year paid $US3.2bn for BHP’s Daunia and Blackwater mines in Queensland that produce metallurgical coal, and later sold down a 30 per cent interest to Nippon Steel and JFE Steel in Blackwater for $US1.08bn.
It places Whitehaven’s balance sheet in a position of strength for future opportunities.
Kestrel is up for sale by EMR Capital through Bank of America and Macquarie Capital.
It is the world’s largest underground coking or metallurgical coal mine, producing about 7.1 million tonnes of coal annually that is used to make steel worldwide.
It is in Queensland’s Bowen Basin, 50km northeast of Emerald, and was purchased from Rio Tinto by the Owen Hegarty-chaired EMR Capital in 2018 for $US2.25bn.
Although EMR Capital owns 52 per cent, Adaro Energy owns the remainder and has pre-emptive rights to buy out EMR’s stake should it opt to not divest its interest. So far only the EMR stake is on offer, but it is understood Adaro Energy would a seller at the right price.
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