Noble Group gets A$412m in cash for Aussie merger

Noble Group will now own 13% of Yancoal Australia after its merger with Noble.

In a release, Noble Group Limited notified its shareholders that its partly owned subsidiary, Gloucester Coal Limited and Yancoal Australia Limited have reached final agreement on the merger of Gloucester with Yancoal.

On completion of the merger, Yancoal is expected to be the largest independent listed coal mining company in Australia with significant organic growth opportunities in its development portfolio.

Under the terms of the final agreement, on completion of the merger, Gloucester shareholders will own 22% of Yancoal and Yanzhou Coal Mining Company Limited ("Yanzhou") will own 78%. Full details of the merger are included in the attached release from Gloucester (the "Proposed Merger").

Gloucester shareholders may elect to also receive 1 Contingent Value Right ("CVR") share for each Gloucester share held. Completion of the merger is subject to certain conditions, including the approval of Gloucester shareholders under a scheme of arrangement. Separate to the merger, eligible Gloucester shareholders will receive A$3.15 cash per Gloucester share.

The board of Gloucester unanimously recommends that shareholders vote in favour of the merger, subject to there being no superior proposal and the independent expert for the transaction concluding that the merger is in the best interests of Gloucester shareholders.

Noble Group will own approximately 13.2% of Yancoal and will receive A$412 million in cash under the terms of the merger. Mr William Randall, director of Noble Group and Head of Hard Commodities, will join the board of Yancoal as a director.

Noble Group will vote all its shares in Gloucester in favour of the Proposed Merger, subject only to there being no superior proposal, and would elect to receive all ordinary shares in Yancoal as scheme consideration.
Noble Group notes the CVR proposal offered under the merger which would provide up to A$3.00 of protected value to Gloucester shareholders. Since acquiring control of Gloucester, Noble Group has consistently stated its desire to ensure minority investors in Gloucester receive fair and equitable treatment as shareholders in a Noble Group controlled company. Consistent with this desire, Noble Group has elected to waive its rights to the CVR entitlement to enable maximum value protection to be available to minority shareholders in Gloucester.

Commenting on the merger, Noble Group Chairman, Mr Richard Elman said "We are very pleased that Gloucester and Yancoal have reached this important milestone in the creation of a world class mining company. Creation of scale and flexibility is increasingly important in commodity production. Yancoal will have a multi-product, multi-mine operation of scale which is extremely well positioned to deliver value to shareholders. We look forward to supporting our investments in the Australian coal sector."