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- Coal mining company Universal Coal (ASX:UNV) believes that the announced buyout offer from TerraCom would “significantly undervalue” it
- On Monday, TerraCom offered to purchase the remaining shares of Universal Coal for $175 million
- However, the company has said the offer is inadequate and incomplete and has told shareholders to take no action
- On market close, Universal Coal remains steady, trading at 24¢ piece
Coal mining company, Universal Coal (ASX:UNV) believes that the announced buyout offer from TerraCom, would “significantly undervalue” it.
On Monday, TerraCom offered to purchase the remaining shares of Universal Coal, that it does not already own, for $175 million.
Under the offer, Universal shareholders will receive 10 cents in cash and about 0.6026 of TerraCom shares for each Universal share held.
However, the company has said the offer is inadequate and incomplete.
TerraCom states that an offer will be made at some point only disclose “approximate” consideration and suggests a vague timeline. Universal also belives it does not provide enough information for shareholders.
“The Bid Committee is concerned that the Implied Offer Price may significantly undervalue the company based on a range of valuation metrics and does not take into account the company’s near-term growth profile,” Universal explained.
Due to that, Universal has appointed Deloitte Corporate Finance to look into the possible offer to determine if it is at shareholders best interest.
Interim Chairman, Mark Eames has told shareholders to take no action.
“We have retained independent experts to value the business and we recommend that no shareholders take any action that would preclude Universal shareholders as a whole from making an informed decision, or allow insufficient time for a competing proposal to materialise,” He explained.
On market close, Universal Coal remains steady, trading at 24¢ apiece.
