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September 9, 2022

China’s Yankuang terminates Yancoal Australia takeover talks

Yancoal Australia owns coal mines in New South Wales, Queensland, and Western Australia.

China’s Yankuang Energy has ended discussions for the potential acquisition of remaining shares in its majority-owned unit Yancoal Australia, citing ‘recent market conditions’.

In May 2022, Yankuang’s $1.8bn bid to purchase the minority stake in the Australian coal firm was rejected.

The Chinese firm had offered a price of $3.6 per share in convertible bonds to acquire 498.2 million Yancoal Australia shares that it previously didn’t own, representing a 37.74% stake.

Following the rejection, Yankuang, which currently holds a 62.26% stake in Yancoal Australia, said it was open to negotiations.

In a filing with the Hong Kong Exchanges and Clearing, Yankuang Energy said: “Yankuang Energy reserves the right to make future acquisitions of Yancoal Shares subject to and in accordance with the Takeovers Code and other relevant regulatory requirements.

“Under Rule 31.1(b) of the Takeovers Code, neither Yankuang Energy nor any person who acted in concert with it, nor any person subsequently acting in concert with any of them, may within six months from the date of this announcement, (i) announce an offer or possible offer for Yancoal, or (ii) acquire any voting rights of Yancoal if Yankuang or persons acting in concert with it would thereby become obliged under Rule 26 of the Takeovers Code to make an offer.”

In July 2022, Reuters reported that Glencore offloaded its minority stake of 6.4% in Yancoal Australia for $293m.

A low-cost coal producer, Yancoal is engaged in producing a mix of premium thermal, semi-soft coking and PCI coals for export.

Owning coal mines in New South Wales, Queensland, and Western Australia, the company currently employs around 4,400 people in full-time roles.

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