Western Coal Corp. announced Thursday it has extended its exclusivity agreement with U.S.-based Walter Energy on talks to sell the company to the American company in a $3.3-billion deal.
Walter Energy cautioned that no definitive agreement has been entered into and so no assurance can be given that the negotiations between Walter and Western will lead to a deal.
Vancouver-based Western Coal produces about two thirds of its coal in northeastern B.C. where it employs more than 900 people, about 50 of those who live in Prince George.
Western Coal had agreed to work with Walter Energy exclusively until Dec. 1 to reach a final deal.
Under the proposal, Western Coal shareholders would receive a combination of cash and Walter shares valued at $11.50, a premium of 55.8 per cent to Western's closing price of $7.38 per share on Wednesday.
The transaction would include a $630-million side deal in which Florida-based Walter Energy will buy 54.5 million shares of Western Coal, or about 19.8 per cent of the total, from Audley Capital.
Walter Energy is based in Tampa, Florida, and operates coal mines in the southern Appalachian region of the eastern U.S. and Alabama's Blue Creek coal region.
As well as metallurgical coal used for making coal, Walter Energy produces coal for energy and coal bed methane gas.
The companies said the deal would create one of the world's largest pure-play metallurgical coal producers in the world. The combined companies would have operations in northern British Columbia, the United States and the United Kingdom.
