Posted on March - 29 - 2010
UK Coal ponders merger
The UK’s biggest coal mining firm said it was assessing a merger proposal involving its production-hit deep mines division.
UK Coal, which has surface mining operations as well as the four deep mines in northern and central England, described the approach as highly conditional and at a very preliminary stage.
While it did not name the party involved, UK Coal said the interest could address its exposure to the volatile performance of its deep mines.
Production last year was at the lower end of the group’s forecasts, while preparation for a new coal face at its Daw Mill deep mine in the West Midlands has been hindered by difficult
geological conditions.
UK Coal shares rose 10 per cent as investors also digested speculation that Peel Holdings, which owns 28 per cent of the firm, has received an approach for its stake. The company said it was not aware of any proposals involving an outright offer for the group, which has substantial property interests comprising around 43,500 acres.
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