THE Queensland billionaire Clive Palmer is poised to own one of the largest undeveloped coal projects in his home state after Waratah Coal yesterday agreed to a sweetened $C100 million ($126 million) takeover offer.
Waratah is attempting to develop a $5.3 billion mine and infrastructure project based on its huge thermal coal resources in the Galilee Basin, which it had originally hoped to develop in an independent manner similar to the Pilbara iron ore project constructed by Fortescue Metals.
Waratah's board had rejected an earlier $C1.41 a share offer from Mr Palmer's private company Mineralogy, but yesterday accepted an increased $C1.60 a share bid after it was unable to attract a higher offer from potential white knight suitors.
"We looked at other alternatives, and this is the one we decided was the one we would recommend to shareholders," said Waratah's chief executive, Peter Lynch. "The world has changed dramatically. Access to capital is looking like it is going to be more difficult."
Mineralogy had bought about 20 per cent of Waratah's shares before launching its initially hostile bid, making it more difficult for rival suitors to gain control of the entire company. Through agreements with Waratah's directors, Mineralogy has now gained control of another 17 per cent of the stock.
Mr Palmer told the Herald Waratah would remain within Mineralogy rather than forming part of his planned $5 billion float of mining house Resource Development International, which he expects to list next year.
He said it was too early to say whether Mineralogy would bring in a joint venture partner to help it develop the project, which will involve the construction of a new railway line and a new coal terminal at Abbot Point.
"It is a large coal resource, probably the biggest in Australia," Mr Palmer said.
A Fosters Stockbroking analyst, Michael Evans, described Mineralogy's bid as "well-timed and opportunistic" in light of the global financial crisis. "They are picking up assets that are worth a lot in the long term," he said.
"In the current market no one is interested about the long run. I think the company is worth more, but given the circumstances I understand why the board accepted the bid."
Waratah shares closed 40c higher at $1.70 yesterday.
