On November 17, 2010, Walter Energy, a leading U.S. producer and exporter of premium hard coking coal for the global steel industry, announced that it submitted a proposal to Western Coal Corp. (“Western Coal”) to acquire the outstanding common shares of Western Coal for CAD$11.50 per share in cash and stock. In connection with the proposal, Walter Energy has entered into an exclusivity agreement with Western Coal under which they have agreed to work exclusively with each other for a period of up to 14 days toward the negotiation of definitive agreements to give effect to the proposal. The transaction would be effected by way of a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia).
Separately, Walter Energy has agreed to purchase from affiliates of Audley Capital (“Audley”) common shares representing 19.8 percent of the outstanding common shares of Western Coal for CAD$11.50 per share, or a total consideration of approximately CAD$630 million (USD$615 million), subject to adjustment in certain circumstances. The total enterprise value of the proposal for Western Coal, including the purchase from Audley Capital, is CAD$3.3 billion (USD$3.2 billion), net of cash on the balance sheet.
Walter Energy has annual revenues of approximately $1.2 billion and employs approximately 2,100 people. It is headquartered in Birmingham, Alabama and is listed on the NYSE “WLT”. Western Coal is a producer of high quality metallurgical coal from mines in northeast British Columbia (Canada), high quality metallurgical coal and compliant thermal coal from mines located in West Virginia (USA), and high quality anthracite coal in South Wales (UK). The Company is headquartered in Vancouver, BC, Canada and it is listed on the TSX and AIM as "WTN".
The Simpson Thacher attorneys working on these transactions are: Peter Gordon, Adam Signy, James Connor, Tom Lamprecht and Austin Hill (M&A); Amie Broder (Tax); Alvin Brown and Aimee Adler (Executive Compensation and Employee Benefits); James Cross and Vanessa Bressler (Credit); and Michael Naughton (Antitrust).