Miners withdraw bid for QR coal network
“Treasurer Andrew Fraser says the State Government will go ahead with the public float of the Queensland Rail (QR) coal business after a consortium of mining companies pulled out of negotiations. He says the State Government had given the miners until Friday to make a binding offer.
The consortium has released a statement saying it could not satisfy its own requirements or those of the Government. Mr Fraser says the consortium contacted him today and did not ask for an extension. ‘It’s been a genuine effort but agreement hasn’t been able to be reached,’ he said. “
Source: ABC News, September 9, 2010
- A consortium of miners made a $4bln bid in May in order to gain control over the rail network on which they depend to transport their coal to the ports./li>
- The withdrawal of the bid comes as a surprise, as many analysts did see the bid as superior to an IPO. Expected return was approx. 60% higher than IPO, but it would leave the government with a part of the company that is hard to sell.
- As the reason of the withdrawal has not been specified, this might be a method of the mining consortium to pressure the government into accepting their bid. In this case, a deal is likely to be announced within a couple of weeks.
- Another explanation of the withdrawal might be that one or more of the miners in the consortium have changed their strategic plans, favouring dealing with a public company rather than an asset owned by a consortium of 13 competitors.
©2010 | Wilfred Visser | thebusinessofmining.com