Yancoal share price lifts as potential takeover slammed

A potential $5.07 per share takeover bid has been criticised by an independent board committee.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • The Yancoal share price is lifting this morning, reaching a high of $5.64 – representing a 3.8% gain
  • The gain comes on the back of news an independent board committee has found a potential takeover bid by Yancoal's parent company and major shareholder Yankuang Energy wouldn't be in the best interests of minority shareholders
  • Though, as Yankuang has a 62% holding in Yancoal, any potential bid might still have a chance of passing

The Yancoal Australia Ltd (ASX: YAL) share price is in the green after the company condemned a potential takeover bid.

Chinese state-owned entity Yankuang Energy Group – Yancoal's parent company and controlling shareholder – recently flagged its intention to put forward a bid for the ASX-listed company.

It's expected to offer $5.07 apiece for all Yancoal shares it doesn't already control.  

At the time of writing, the Yancoal share price is $5.56, 2.39% higher than its previous close.

Let's take a closer look at the latest on the potential takeover talks.

Group of smiling coal miners in a coal mine

Image source: Getty Images

Yancoal share price on the rise

The Yancoal share price is gaining this morning after an independent board committee deemed Yankuang's potential acquisition offer wouldn't be in the best interest of the company's minority shareholders.

Thus, the company won't be supporting a $5.07 per share bid or recommending it to shareholders.

However, Yankuang has a large holding in Yancoal – its stake makes up more than 62% of the company.

That means it might only need the support of a few other major shareholders to get a takeover bid across the line.

It's also worth noting Yancoal hasn't yet received an official takeover offer or proposal from its major shareholder.

The potential offer was previously expected to be made up of convertible bonds issued by Yankuang Energy. Yancoal noted, that if successful, the offer could see the company de-listed from the ASX and the Hong Kong Stock Exchange.

The independent board committee behind today's news was appointed by the ASX-listed coal producer. Its advisors included Gilbert + Tobin, advising on Australian legal matters; Freshfields Bruckhaus Deringer, advising on Hong Kong legal matters; and Deloitte Corporate Finance, advising on strategic and commercial matters.

News of a potential takeover bid comes amid a particularly good period for Yancoal and its share price.

Strong energy prices saw the coal company recording record revenue in 2021. On top of that, demand for the black rock has surged in 2022.

The Yancoal share price is currently 99% higher than it was at the start of this year. It has also gained 168% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

Young woman dressed in suit sitting at cafe staring at laptop screen with hands to her forehead looking tense.
Energy Shares

ASX 200 energy shares whipsaw amid fragile ceasefire

ASX 200 energy shares are leading the market today after a substantial sell-off yesterday.

Read more »

Falling prices of oil demonstrated by a red arrow and barrels of oil.
Energy Shares

ASX shares to watch as oil price crashes

The turnaround in oil prices is a huge headwind for the ASX shares.

Read more »

Red arrow going downwards in front of oil pumpjacks.
Energy Shares

Why are Santos and Woodside shares crashing today?

Let's see what is weighing on these shares on Wednesday.

Read more »

A Santos oil and gas company employee stands in a field looking at an iPad with an oil rig in the background and grey skies above, representing carbon in the atmosphere.
Energy Shares

Santos shares sink 5% despite another strong Alaska result

Santos shares fall despite strong Alaska oil appraisal and project progress.

Read more »

An oil worker holds his hands in the air in celebration in silhouette against a seitting sun with oil drilling equipment in the background.
Energy Shares

4 reasons why Woodside shares are a screaming buy right now

The oil and gas giant's shares have rallied off the back of tighter global oil supply.

Read more »

An oil worker assesses productivity at an oil rig as ASX 200 energy shares continue to rise.
Broker Notes

Up 54% in 2026, are Woodside shares still a good buy today?

A top analyst offers his outlook on the surging Woodside share price.

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles.
Broker Notes

3 reasons to buy New Hope shares today

A leading analyst expects more outsized gains from New Hope shares.

Read more »

A woman in a red dress holding up a red graph.
Energy Shares

Why are shares in this uranium company surging today?

It's big news for this emerging uranium player.

Read more »