Massey Gains on ArcelorMittal Buyout Talk
NEW YORK (TheStreet) -- Massey Energy (MEE) shares have moved higher on a report that steel leader ArcelorMittal (MT) - Get Report is interested in buying the coal producer .
Massey stock is up 2% to $48.07 in morning trading.
|
On Sunday, the
Wall Street Journal
reported that the Luxembourg-headquartered steelmaker has been exploring a possible deal for a few months now. The deal would help vertically-integrate its operations given that coal is a key ingredient in steel manufacturing.
Over the last few weeks, Massey has been discussing various strategic options, including a sale.
The Richmond, VA-based company is also discussing a possible recapitalization plan that would help pay investors, or a share buyback,
WSJ
reported. Management may also choose to do nothing.
Massey's board is expected to convene next week for an annual meeting and come to a consensus on its strategic options, according to
WSJ
.
On April 5, a disastrous explosion at Massey's Upper Big Branch coal mine in Montcoal, W. Va. killed 29 miners, making it the worst coal-mining accident in four decades. Since then, the company has been under immense strain from tougher regulatory supervision and productivity constraints, prompting the company to explore strategic options.
During first week of November,
WSJ
reported that Massey was "weighing a takeover offer" from competitor
Alpha Natural Resources
(ANR)
, while exploring other strategic options.
Massey, the sixth-largest U.S. coal producer with a market cap of more than $4 billion, is up about 13% year-to-date in share value. However, the stock is down more than 10% since the Upper Big Branch mine disaster.
Last week,
AP
reported that world's biggest coal producer, state-owned Coal India, was thinking about buying mining assets from Massey and another U.S. coal producer,
Peabody Energy
(BTU) - Get Report
, as Indian miners increasingly look to the U.S. to help fulfill their commodities needs.
-- Written by Andrea Tse in New York.
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RELATED STORIES:
>> Coal India Eyes Peabody, Massey Assets
>> Massey Energy Surges on Buyout Rumors
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