EMR's interest in Kestrel has earned US$51m per annum from 1 July 2022 to 30 June 2024.
Typically coal companies trade on low single digit multiples. Let's be generous and give it a 4 times multiple. The result is US$203m.
If there are concerns about West, give it a 2 times multiple. The result is US$101m.
Back in the day, EMR paid US$1.2b. Very difficult to see them sell it for a similar price, following depletion and higher royalties.
Anyone trying to sell EMR's interest for "$US3bn-plus" (I'm looking at the bankers for putting that article in the Australian six weeks ago) is as crazy as Forrest back in August 2023. But I'd be surprised if they could find a buyer at US$300m.
WHC Price at posting:
$6.62 Sentiment: None Disclosure: Held
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