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Investors seem to take seriously the latest takeover chatter surrounding Walter Energy (WLT),...

Investors seem to take seriously the latest takeover chatter surrounding Walter Energy (WLT), sending shares +7.5% premarket as vague rumors circulate that bidders could emerge. BHP Billiton (BHP) is said to be interested again; Glencore (GLCNF.PK) could be another candidate; Anglo American has been mentioned in the past. Other coal names are up: ANR +1.9%, CNX +1.6%, ACI +1.3%, BTU +0.8%.
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Comments (5)
  • Brandond
    , contributor
    Comments (397) | Send Message
     
    Walter takeout makes a lot of sense for BHP or Glencore who both have strong balance sheets. WLT is a small acquisition for either suitor and smart money buys companies when they are at lows such as WLT. Would not surprise me to see a bidding war given the quality of WLT's met coal and the fact that BHP and Glencore both need to put their excess cash to work for future growth.
    6 Dec 2012, 09:25 AM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    I don't understand the other coal stocks going up though when the only chatter is about Walter...
    6 Dec 2012, 10:01 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3601) | Send Message
     
    If you notice the extreme volatility in JRCC, compare with other coal stocks, I guess there is even more acquisition speculation going on. JRCC can easily move up or down 10% on a regular day on no news. Such volatility is unreal.
    6 Dec 2012, 01:51 PM Reply Like
  • wigit5
    , contributor
    Comments (4218) | Send Message
     
    I think any company trying to buy JRCC now would be labeled psychotic, wait and see if you can get them in Bankruptcy first then pick up the pieces if not, when coal stocks show some stability buy them.
    6 Dec 2012, 02:04 PM Reply Like
  • Seth Walters
    , contributor
    Comments (676) | Send Message
     
    As I've said before, BHP has little reason to buy WLT at a time that they are closing their own Australian coal mines and laying off their own coal workers. Alabama is also a lot farther from China than Australia, and sea freight costs money. It would make a lot of sense for a company that didn't have BHP's assets to load up on coal (although I believe they are about to get cheaper along with the reared of the market). But if I'm not mistaken BHP has these assets now (except closer to china) and they are currently shuttered. If they did do it it sounds more like a way of hedging against central bank printing by using their cash to buy real assets... But why WLT?
    6 Dec 2012, 02:52 PM Reply Like
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