up 17 percent, page-8

Resource Pacific shares spike

2007-Dec-04 06:47 PM

Shares in takeover target Resource Pacific Holdings Ltd soared more than 23 per cent amid speculation that a second predator could be circling the company.

The semi-soft coking coal and thermal coal producer was among the top five traded energy stocks by volume on the Australian Securities Exchange on Tuesday, with 8.52 million shares worth $22.7 million traded, representing about 2.7 per cent of its issued shares.

A Resource Pacific spokesperson said the company did not know the identity of the party or parties trading the stock.

Resource Pacific's shares closed 48 cents, or 19.75 per cent, higher to $2.91 after hitting a high of $2.99 in intraday trade.

A substantial shareholding notice released to the market after trading ceased on Tuesday identified international bank ABN AMRO as a purchaser of Resource Pacific stock on November 30.

It now holds 5.003 per cent of Resource Pacific's shares.

Fat Prophets analyst Gavin Wendt said it was not clear whether ABN AMRO was acquiring the shares on behalf of another party "or whether ABN AMRO have decided they really like Resource Pacific all of a sudden".

"There has been obvious market interest in coal companies in the past couple of months, which has seemed to have intensified in the past couple of weeks, particularly for thermal coal, which is close to record highs," Mr Wendt said.

Fellow coal miner New Hope Ltd is offering 0.94 New Hope shares for every Resource Pacific share, valuing the target at $808.34 million based on New Hope's closing share price on Tuesday of $2.40.

Resource Pacific's current market capitalisation is $921.3 million, based on Tuesday's closing price.

New Hope wants to acquire Resource Pacific's Newpac underground coal mine in New South Wales' Hunter Valley.

About six weeks ago, Perth-headquartered broking house Euroz Securities Ltd tipped that alternative takeover offers for Resource Pacific could emerge in the medium term, most likely after New Hope's bidder's statement and Resource Pacific's target statement were released.

New Hope released a replacement bidder's statement on Tuesday while Resource Pacific sent a letter to its shareholders urging them to ignore the bid, although it is yet to make a formal recommendation or issue its target's statement.

New Hope's offer is scheduled to close on February 1 next year.

By Rebecca LeMay