UPDATE: Golden Energy makes 95 Australian-cent a share bid for Stanmore Coal

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Golden Investments (Australia), which is 51 percent owned by Golden Energy and Resources (GEAR), said on Monday that it would offer to acquire all of Australian-listed Stanmore Coal for 95 Australian cents a share in cash.

Shares of Stanmore Coal surged 16.87 percent to 97 Australian cents a share, above the offer price, by 8:13 A.M. SGT.

Golden Investments, in which Ascend Global Investment Fund SPC owns the remaining 49 percent, said on Monday that it considered the offer attractive to Stanmore Coal shareholders.

“The offer is consistent with historical high levels in the price of Stanmore Coal shares and represents a premium to the current price and the longer term historical trading price,” the filing before the market open said. “This provides an opportunity for Shareholders to exit at close to a five-year high.”

Stanmore Coal had 251.80 million issued shares as of 30 June, it said.

In addition, GEAR agreed to acquire 50.11 million Stanmore Coal shares, or a 19.9 percent stake, from the Australian company’s largest shareholder for 95 Australian cents a share, with Golden Investments agreeing to acquire the shares from GEAR for A$47.60 million after the offer is completed, the filing said.

“GEAR is a significant thermal coal producer in Indonesia. By acquiring an interest in Stanmore Coal, a primarily coking coal focused company, GEAR hopes to enhance its overall asset portfolio in the current commodity price environment by diversifying and expanding its coal product suite and geographical presence,” the company said in the filing to SGX before the market open on  Monday.

Golden Investments will fund the offer via cash provided by GEAR and Ascend Global as consideration for additional shares in Golden Investments, it said.

GEAR and Ascend Global will fund their subscriptions to Golden Investments’ shares by a combination of existing cash reserves, GEAR’s committed finance facility of up to A$150 million and Ascend Global’s undrawn capital commitments of US$100 million from investors, it said.

GEAR has agreed to subscribe for Golden Investments shares for an aggregate ash consideration of up to A$79.25 million, while Ascend Global is only obliged to subscribe for up to A$121.88 million if the offer is accepted by enough Stanmore Coal shareholders as would result in Golden Investments holding at least 51 percent of the Australian company, it said.

GEAR is around 87 percent owned by entities affiliated with Indonesia’s Widjaja family, it said.

Stanmore Coal has an interest in around 10 coal mines and projects for both metallurgical and thermal coal in Queensland, Australia, it said.

Ascend Global is a fund managed by Ascend Capital Advisors (S), a Singaporean-based investment fund manager, it said.

This article was originally published on Monday 19 November 2018 at 8:48 A.M. SGT; it has since been updated.