UBS valuations on up-for-sale BHP mines excessive, says Bell Rock
Bell Rock Capital Management, the major Whitehaven Coal shareholder campaigning against the proposed purchase of two BHP mines, says it believes UBS has given the transaction an “excessive valuation”.
Mike O’Mara, Bell Rock’s chief investment officer, said the secretive London-headquartered fund did not want “a situation where Whitehaven use a high valuation in the future to sell a bad deal on Blackwater and Daunia”.
The Blackwater metallurgical coal mine in Queensland.
Blackwater and Daunia are two coking coal mines placed on the market by BHP and its partner, Mitsubishi. Whitehaven last month confirmed it was participating in the sales process, which is being run by Macquarie, while others expected to be interested in the assets include Coronado Global Resources, Stanmore Resources and Indonesian firm BUMA.
The purchase of the two mines, which produce coking coal used for steel manufacturing, would turn Whitehaven into a major force in that sector as demand for thermal coal, where it is currently focused, falls away.
But Bell Rock has campaigned for Whitehaven to ditch plans to acquire the assets, and instead continue with a generous capital return program.
Whitehaven is being advised by Bank of America and UBS. On Thursday, The Australian Financial Review reported that analysts at the latter had issued two detailed research notes on the transaction in a four-day period including on the same day that they were restricted from discussing it.
Those restrictions are usually put in place when the analysts are brought into the team working on the transaction and have access to confidential information. It is also done to prevent perceived conflicts of interest in material they circulate about various transactions to
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