Australian Miners Rebound; Gloucester Receives $2.2 Billion Offer

Marcus Jacob
23 Dec, 2011
New York City

Australian benchmark index increased more than 1% and for the week closed down 0.5%. Gloucester Coal received $2.2 billion merger offer from China based Yanzhou Coal. Retailers traded weak on the worries that the slump may extend next year.

[R]8:00 PM Sydney – Australian benchmark index increased more than 1% and for the week closed down 0.5%. Gloucester Coal received $2.2 billion merger offer from China based Yanzhou Coal. Retailers traded weak on the worries that the slump may extend next year.[/R]

Australian stocks gained more than 1% after resource sector stocks and banks led the advance in the market.

Retail sector stocks were in focus on the ongoing worries that retail slump may extend to next year. Banks traded higher coal miners were on the upswing after China based Yanzhou Coal offered $2.2 billion proposal for Gloucester Coal.

The ASX 200 index closed up 1.2% or 49.6 to 4,140.4 and All Ordinaries index increased 49.9 or 1.2% to 4,192.1. For the week, ASX index declined 0.5% and the All Ordinaries fell 0.6%.

The Australian dollar edged lower 0.2% and closed at US$1.015.

In trading, 1 billion shares changed hands worth $4.3 billion and for every share that declined 18 increased.

Gloucester Valued $2.2 Billion by Yanzhou Coal

Gloucester Coal Limited soared 22% after China based Yanzhou Coal issued a merger proposal of $3.20 a share in cash and stock valued as much as $6.96 in a new company.

The complex merger values the company as much as $2.2 billion and will provide cash to shareholders in two stages. After the completion of the merger agreement in six months shareholders will receive $2.64 of cash held on the balance sheet and a special dividend of 56 cents a share in the next six months.

The merged entity of coal properties in China and in Australia will have 77% shares controlled by Yanzhou Coal and 23% controlled by existing Gloucester shareholders.

Stock Movers

BHP Billiton Ltd added 50 cents to $35.15 and Rio Tinto Ltd increased $1.19 to $61.84.

Fortescue Metals Group increased 3 cents to $4.49, Lynas Corporation Limited closed up 3 cent to $1.16 and Iluka Resources added $0.23 to $15.69.

Gloucester Coal Limited soared 22% or $1.52 to $8.55 after China based Yanzhou Coal issued a merger proposal of $3.20 a share in cash and stock valued as much as $6.96 in a new company.

Oil Search Limited traded up 6 cents to $6.37, Santos Limited declined 2 cents to $12.36 and Woodside Petroleum increased $0.43 cents to $31.53.

Commonwealth Bank of Australia increased 49 cents to $49.81 and National Australia Bank rose 40 cents to $23.70. ANZ edged up 30 cents to $20.85. Westpac inched higher 19 cents to $20.54.

Cochlear rose $0.08 to $62.20 and the stocks traded at a six week high.

David Jones Limited decreased 2 cents to $2.43 and Wesfarmers Limited increased 23 cent to $30.29 Harvey Norman Holdings closed up 1 cent to $1.85. Myer closed higher 1 cent to $1.99.

Woolworths Limited closed down 11 cents to $25.50 and JB Hi-Fi Limited decreased $0.02 to $11.64.

Billabong International Ltd added 2 cents to $1.80 and Kathmandu rebounded 9 cents to $1.32 after a day ago the retailer issued sales and earnings warnings.

Qantas Airways Ltd closed up 3 cents to $1.50, Virgin Australia closed unchanged at 35.5 cents and Flight Centre declined $0.26 to $17.34.

QBE Insurance Group Limited increased 19 cents to $13.25 and QR National added 7 cents to $3.50.