SINGAPORE (Nov 19): Golden Investments, a joint offer vehicle 51% owned Golden Energy and Resources (GEAR), on Monday announced it has made a takeover bid for ASX-listed Stanmore Coal at A$0.95 per share.

The maximum consideration payable by Golden Investments under the offer would be A$201.13 million ($202 million).

The offer price is 10.5% above the volume weighted average price (VWAP) of A$0.8597 per Stanmore Coal share for all trades done on Friday. At the offer price, the 251.8 million issued Stanmore Coal shares value the target company at A$239.21 million.

Stanmore Coal and its subsidiaries are in the exploration, development, production and sale of metallurgical and thermal coal via coal mines and projects in Queensland, Australia.

GEAR is a significant thermal coal producer in Indonesia. By acquiring an interest in Stanmore Coal, a primarily coking coal focused company, GEAR says it hopes to enhance its overall asset portfolio in the current commodity price environment by diversifying and expanding its coal product suite and geographical presence.

Based on the Stanmore Coal’s FY2018 results, the net asset value (NAV) and the net tangible assets (NTA) of the sale shares as at June 30 are approximately A$14.56 million and approximately A$13.81 million, respectively. The net profit before income tax, minority interests and extraordinary items attributable to the sale shares is approximately A$2.00 million.

The takeover offer follows an agreement on Friday by GEAR to acquire 50 million shares or a 19.9% stake in Stanmore Coal from Greatgroup Investments at the A$0.95 or A$47.6 million. This will be funded through internal resources. Following the close of the offer, GEAR expects to divest this stake to Golden Investments.

The remaining 49% of Golden Investments is owned by Ascend Global, an investment fund with assets under management of US$93 million and is managed by Ascend Capital Advisors (S), which is registered with the Monetary Authority of Singapore as a Registered Fund Management Company.

Golden Investments, GEAR and Ascend Global have entered into a share subscription agreement under which GEAR and Ascend Global have agreed to subscribe for additional shares in Golden Investments to fund the offer. GEAR has agreed to subscribe for shares totalling up to A$79.25 million, while Ascend Global is to subscribe for shares up to A$121.88 million.

As at 9.37am, shares in GEAR are up 3.5% to date 26 cents, giving it a market cap of $623.6 million.