Thai Banpu in $443 mln bid for Australia's Hunnu
* Banpu offers to buy Hunna at A$1.8 a share, 30% premium to mkt
* Sees growth potential in Mongolia
* Plans to send bidder's statements by early Oct
* Banpu's share down on concerns about short-term impact (Adds company, analyst comments)
By Khettiya Jittapong and Michael Smith
BANGKOK/SYDNEY, Sept 12 (Reuters) - Thailand's largest coal miner, Banpu Pcl , has offered to buy Mongolia-focused Australian coal explorer Hunnu Coal Ltd for A$423 million ($443 million) in its first push into Mongolia's fast-growing coal industry.
The deal marks the latest acquisition for Banpu, Southeast Asia's fourth-biggest coal miner, which has been expanding in Indonesia and Australia. Last year it acquired Australia's Centennial Coal for $2 billion. .
It also highlights the growing race to mine coal from Mongolia to feed insatiable demand in China which relies on coal for about 70 percent of its energy. Inner Mongolia accounts for a large and growing slice of China's domestic coal supply.
The friendly takeover offer for the loss-making Hunnu sent Banpu's shares down on expectations the acquisition, at a 30 percent premium to the market price, would swell Banpu's debt and exert pressure on short-term earnings.
Hunnu has licences to operate the Tsant Uul coking coal project in Mongolia and has stakes in two other Mongolian projects, Altai Nuurs and Unst Khudag. Banpu has said it expected Hunnu's first mine to start commercial operations in the next 2-3 years.
"The acquisition may have a negative impact on Banpu's net profit in the short term. But in longer term, it should be positive," Bualuang Securities said in a note to clients.
By the midday break, Banpu shares were down 1.3 percent in Bangkok where the broad market was off 1.8 percent.
Banpu already owns 12.4 percent of Hunnu. It offered to buy its remaining shares at A$1.80 ($1.87) each and estimates its fully diluted equity value at A$477 million ($495 million).
Perth-based Hunnu listed on the Australian Securities Exchange at 20 cents a share in February 2010. Its stock closed on Friday at A$1.385, valuing the company at nearly A$300 million. The shares were suspended pending the announcement.
Banpu's statement confirmed an earlier report Banpu was in advanced talks on an offer for Hunnu .
ANALYSIS: Mongolia needs China for coal
FACTBOX on political risks in Mongolia [ID:nRISKMN
EXPOSURE TO MONGOLIA
The Thai miner will send bidder's statements to Hunnu shareholders and optionholders by early October and will use cash and loans to finance the purchase, the statement said.
"Banpu is strongly supportive of the Hunnu management team and its current strategy, and is excited to potentially increase its exposure to the Mongolian coal sector," it said.
Banpu has said it was keen to invest in Mongolia which has extensive coal deposits and close proximity to key export markets such as China and India.
Banpu, valued at $5.7 billion, plans to invest $750 million between 2011 and 2015 to boost output and earnings growth.
Through its Indo Tambangraya Megah venture (ITM), Banpu owns five mines in Indonesia, the largest revenue contributor. It also has two mines in China and 10 in Australia after the acquisition of Centennial Coal.
After exhausting local coal reserves, Banpu is among the top Thai companies aggressively looking for opportunities to buy assets overseas.
In March, Thailand's largest energy firm, PTT Pcl , completed the A$544.1 million ($546 million) acquisition of Australia's Straits Resources Ltd, its first foray into the coal business and its second investment in Australia.
The Australian Financial Review newspaper said Banpu was expected to offer the usual 25 to 30 percent control premium on top of Hunnu's existing market value.
Hunnu was not immediately available to comment.
JPMorgan is advising Banpu on the deal, a source close to the deal said. ($1 = 0.955 Australian Dollars) (Editing by Jason Szep)
* Sees growth potential in Mongolia
* Plans to send bidder's statements by early Oct
* Banpu's share down on concerns about short-term impact (Adds company, analyst comments)
By Khettiya Jittapong and Michael Smith
BANGKOK/SYDNEY, Sept 12 (Reuters) - Thailand's largest coal miner, Banpu Pcl , has offered to buy Mongolia-focused Australian coal explorer Hunnu Coal Ltd for A$423 million ($443 million) in its first push into Mongolia's fast-growing coal industry.
The deal marks the latest acquisition for Banpu, Southeast Asia's fourth-biggest coal miner, which has been expanding in Indonesia and Australia. Last year it acquired Australia's Centennial Coal for $2 billion. .
It also highlights the growing race to mine coal from Mongolia to feed insatiable demand in China which relies on coal for about 70 percent of its energy. Inner Mongolia accounts for a large and growing slice of China's domestic coal supply.
The friendly takeover offer for the loss-making Hunnu sent Banpu's shares down on expectations the acquisition, at a 30 percent premium to the market price, would swell Banpu's debt and exert pressure on short-term earnings.
Hunnu has licences to operate the Tsant Uul coking coal project in Mongolia and has stakes in two other Mongolian projects, Altai Nuurs and Unst Khudag. Banpu has said it expected Hunnu's first mine to start commercial operations in the next 2-3 years.
"The acquisition may have a negative impact on Banpu's net profit in the short term. But in longer term, it should be positive," Bualuang Securities said in a note to clients.
By the midday break, Banpu shares were down 1.3 percent in Bangkok where the broad market was off 1.8 percent.
Banpu already owns 12.4 percent of Hunnu. It offered to buy its remaining shares at A$1.80 ($1.87) each and estimates its fully diluted equity value at A$477 million ($495 million).
Perth-based Hunnu listed on the Australian Securities Exchange at 20 cents a share in February 2010. Its stock closed on Friday at A$1.385, valuing the company at nearly A$300 million. The shares were suspended pending the announcement.
Banpu's statement confirmed an earlier report Banpu was in advanced talks on an offer for Hunnu .
ANALYSIS: Mongolia needs China for coal
FACTBOX on political risks in Mongolia [ID:nRISKMN
EXPOSURE TO MONGOLIA
The Thai miner will send bidder's statements to Hunnu shareholders and optionholders by early October and will use cash and loans to finance the purchase, the statement said.
"Banpu is strongly supportive of the Hunnu management team and its current strategy, and is excited to potentially increase its exposure to the Mongolian coal sector," it said.
Banpu has said it was keen to invest in Mongolia which has extensive coal deposits and close proximity to key export markets such as China and India.
Banpu, valued at $5.7 billion, plans to invest $750 million between 2011 and 2015 to boost output and earnings growth.
Through its Indo Tambangraya Megah venture (ITM), Banpu owns five mines in Indonesia, the largest revenue contributor. It also has two mines in China and 10 in Australia after the acquisition of Centennial Coal.
After exhausting local coal reserves, Banpu is among the top Thai companies aggressively looking for opportunities to buy assets overseas.
In March, Thailand's largest energy firm, PTT Pcl , completed the A$544.1 million ($546 million) acquisition of Australia's Straits Resources Ltd, its first foray into the coal business and its second investment in Australia.
The Australian Financial Review newspaper said Banpu was expected to offer the usual 25 to 30 percent control premium on top of Hunnu's existing market value.
Hunnu was not immediately available to comment.
JPMorgan is advising Banpu on the deal, a source close to the deal said. ($1 = 0.955 Australian Dollars) (Editing by Jason Szep)
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