Source:Business-Mongolia, The Sydney Morning Herald                        Date: 14 September, 2011

Thailand's biggest coal producer, Banpu, agreed to buy all outstanding shares of Hunnu Coal, valuing the firm at USD 477 million. Banpu owns 12 percent of Hunnu Coal.

The firm offered AUD 1.80 per share, 30 percent more than the shares were worth 8 September. Banpu's offer is 51 percent higher than Hunnu's 20-day share price average. The acquisition would give Banpu full control of Hunnu's 11 coking and thermal coal projects in Mongolia. The firm is most interested in Mongolia's mining sector because of its close proximity to China. Hunnu share prices closed at USD 1.72, slightly below Banpu's offer.

This bid by Banpu takes a lot of pressure off Hunnu's management and it's not surprising that they recommended this bid because it basically removes any pressure on them to finance these projects, said Matthew Whittal, a Hong Kong based analyst at Renaissance Capital.

The bid for Hunnu depends on if the firm can pass regulatory approval for its proposed projects in Mongolia.

Record coking coal prices make acquisitions like this very attractive. This attempt is just one of a number of recent acquisition attempts and successes this year. A total of USD 20.15 billion of takeover bids for coal mining companies valued at USD 100 million or more each during the first nine months of this year. Last year acquisitions totaled at USD 7.06 billion.