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Noble says to get US$440 mln in Gloucester merger

LONDON - Singapore-listed commodity trader Noble Group will vote all its shares in Australia's Gloucester Coal in favour of a merger with Yancoal Australia and will get A$412 million (US$440 million) under the deal terms.

On completion of the merger, Yancoal is expected to be the largest independent listed Australian coal miner, Noble, which owns nearly two-thirds of Gloucester, said on Tuesday.

China's Yanzhou Coal Mining Company Limited, Yancoal's majority owner, has a clearly stated aim of growing its Australian mining business.

Yanzhou bought Australian miner Felix Resources in 2009 for A$3.3 billion and was required to float at least 30 per cent of the business by 2012.

Noble Group will own approximately 13.2 per cent of Yancoal, and William Randall, Noble director and Head of Hard Commodities, will join the Yancoal board of directors.

Gloucester produced 5 million tonnes of coal in 2011 but plans to expand substantially over the next decade, while Yancoal exported 8.1 million tonnes in 2010.

Commenting on the merger, Noble Group chairman, Richard Elman said: 'Creation of scale and flexibility is increasingly important in commodity production. Yancoal will have a multi-product, multi-mine operation of scale, which is extremely well positioned to deliver value to shareholders.'

Under the final agreement terms, shareholders in Sydney-based Gloucester will own 22 per cent of Yancoal and China's Yanzhou Coal Mining Company Limited will own 78 per cent.

Separate to the merger, eligible Gloucester shareholders will receive A$3.15 cash per Gloucester share.

The Gloucester board has also unanimously recommended shareholders vote for the merger.

Shares in Gloucester leapt in December after Yanzhou announced its intention to merge in a A$700 million deal .

Noble, whose businesses range from cotton and sugar to coal and iron ore, earned US$106 million in the fourth quarter of 2011 for a full-year profit of US$431 million, but like many traders it suffered from volatile markets and poor processing margins. -- REUTERS

Business Times - 07 Mar 2012

Noble unit backs Yanzhou's takeover offer

Revised deal sees reduction in cash component Gloucester Coal shareholders will get from its sale

By FELDA CHAY

THE board of Noble Group's Australia-listed subsidiary, Gloucester Coal, yesterday declared its support for a A$2.05 billion (S$2.74 billion) stock-and-cash takeover offer from China's Yanzhou Coal Mining Co Ltd, even as an amendment was made to cut the cash component shareholders will receive from the sale.

Noble said it would back the revised deal, even though it gives the commodity firm a smaller stake in Yancoal Australia Ltd - Yanzhou Coal's unit that will absorb the Gloucester business. Noble will also receive a cash payout that is A$8 million lesser.

Instead of the previously announced cash payment of A$3.20 per share, Gloucester shareholders will now receive A$3.15 a share. The deal values the firm at A$10.11 a share - 43.8 per cent above Gloucester's last traded price of A$7.03 before the takeover was first unveiled in December. It was previously valued at A$10.16.

Gloucester said the cut to the cash component reflects the cancellation of Gloucester options for cash amounts settled with Yanzhou Coal. The amended deal also raised slightly Yanzhou Coal's stake in Yancoal. Yanzhou Coal will now own 78 per cent of Yancoal, instead of the previously announced 77 per cent.

Gloucester's shareholders will own the remaining 22 per cent, with one Gloucester share turned into one Yancoal share.

The revisions mean that Noble will own 13.2 per cent of Yancoal and receive A$412 million in cash from the takeover. Previously, Noble was supposed to receive about A$420 million and own a 13.7 per cent stake in the merged entity. Noble said yesterday that it was still backing the deal.

'Noble Group will vote all its shares in Gloucester in favour of the proposed merger, subject only to there being no superior proposal,' it said in a statement. Noble owns about 64.5 per cent of Gloucester.

Under the finalised deal, Gloucester shareholders will receive the A$3.15 cash payment where 44 cents will be paid as a special dividend. They will also receive one Yancoal share for every Gloucester stock held.

Yanzhou has also offered to Gloucester shareholders a contingent value right share (CVRS) scheme, under which it will pay as much as A$3 a share should Yancoal's stock fall below A$6.96 in the 18 months after the deal closes.

Said Gloucester board chairman James MacKenzie: 'The Gloucester directors recognised from the outset the merits of combining the Gloucester and the Yancoal assets. . . This transaction provides Gloucester shareholders with the opportunity to participate in a globally significant coal company that is expected to be Australia's largest listed pure-play producer.'

The deal is subject to a number of approvals from regulators such as Australia's Foreign Investment Review Board.

Noble's shares fell 4.6 per cent to S$1.335 yesterday amid a broad market retreat. In Australia, Gloucester's shares fell 3.7 per cent to close at A$8.15.

on the merge scheme of Aston Resources and Whitehaven.

Noble was a corner stone investor in Aston Resource back in 2010, has a stake just below 5%. Noble also has a 1.5Mtpa(thermal coal) off-take agreement with Aston Resources for 10 years commercing 2013.

on the reverse takeover of Whitehaven by Gloucester in 2009, the relationship between Noble and Whitehaven might not be good, IMO. Will Noble continue to be an investor of Whitehaven (the merged co)?

one of the synergy between Aston Resources and Whitehaven is to blend Aston Resources' low ash high energy content thermal coal with Whitehaven's high ash low energy content thermal. But with Noble's 1.5Mtpa off-take, there is hardly any thermal coal left to blend with Whitehaven in the first 10 years starting from 2013.

Will the merged co buy back Noble's off-take agreement if the merger deal goes through?

my speculation only.

Is Nova Group a better buy compared to Noble Group?

Nova essentially trades the steel value chain...

With the current stock price at 1 year low, can anyone points out where is the cause for such down grading Thank you

For years, I never understood what is the model of trading, supply chain companies all about - high working capital in order to support higher volume of business and in turn chalking up never ending growth of debt burden.

Somehow, one must have leap of faith in such business - olam is another such company.

Can anyone explain to me how to value Noble and Olam? Nevermind about the share price as it will take care of itself.

(14-05-2012, 02:51 PM)Eastman1448 Wrote: [ -> ]With the current stock price at 1 year low, can anyone points out where is the cause for such down grading Thank you

Noble - a sinking ship, or still a aircraft carrier? Its share price has been on a persistent downward trend for some 18 months now (since Feb2011).....
http://finance.yahoo.com/q/bc?t=2y&s=N21...=l&c=&ql=1
and has under-performed the overall SGX market (i.e. vs. STI) by some 40% in the past 12 months (since Aug2011).....
http://finance.yahoo.com/q/bc?t=2y&s=N21...5Esti&ql=1

To be fair to Noble Group. It is one of the 10 baggers listed in SGX. In year 2000, its share price is a mere 0.08 cts according to CIMB charts. Now its 1.0+. Compare this to STI index over the long term. Commodity shares are not doing well not just Noble. Olam, Wilmar are also not doing well. I guess the commodity industry is taking a breather after a good run-up.

Not vested in any of such shares as i am not interested in high debt companies.

*For the full article, please visit the website.

The Straits Times
www.straitstimes.com
Published on Aug 14, 2012
Noble's Q2 profits up 39% on energy and metal sales

HONG KONG - Noble Group, Asia's biggest commodity supplier, yesterday said second-quarter profit rose 39 per cent because of higher sales from energy and metals.

Net income was US$194.8 million (S$242.4 million) in the three months ended June 30, from US$139.8 million a year earlier, the Hong Kong-based, Singapore-listed company said in a statement. Sales rose 23 per cent to US$24.2 billion.

Noble, which counts China's sovereign wealth fund among its biggest shareholders, said sales from its energy and metals units were a record in the quarter.

Revenue advanced 42 per cent at its energy unit, its largest, and 28 per cent in its metals business.

"It's generally a good set of results," said DBS Vickers Securities (Singapore) analyst Mervin Song, who rates the stock a buy.

"Energy is doing much better than what I thought."

The stock fell 2.2 per cent to $1.115 before the earnings announcement. Sales at its energy unit advanced to US$16.5 billion in the quarter, from US$11.6 billion a year ago, as volumes rose 43 per cent.

"These are generally pleasing numbers given that the market environment has been unusually uncertain for the entire period," Noble chief executive officer Yusuf Alireza said in a separate statement.

Revenue from Noble's metals division gained to US$3.6 billion in the quarter even as volumes fell 16 per cent from a year earlier to 10.7 million metric tons.

The company has "adopted an essentially cautious stance to the market" as iron ore prices declined from April, it noted.
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Have you guys heard? there is terrible drought now in US affecting the corn harvest there. A lot of grain especially corn goes into meat production and probably seen supermarket labels like 'corn fed chicken or corn beef etc ... ' well US being the largest corn exporter in the world means everybody is gonna be affected by this drought but the biggest going to be affected is China, China is the worlds biggest pork producer and consumer in the world and as China's middle class grows people are naturally going to spend more on better food like buying more meat (and also drink more baijiu ) so it means CCP government in order to keep grumbling people happy and well fed has to import more grain to meet production demands.

if you do the math
approx 8 pounds of corn = 1 pound of beef
approx 4 pounds of corn = 1 pound of pork

1 ton = 2204.622621849 pounds

China consumed a mind boggling 50.7million tonnes of pork in 2010 and that is going to require a lot of grain where it is now shortage.

vested 20 lots

video link: Nobel CEO says china may become largest corn importer

Reuters video link: scorched earth ...