Russian steelmaker Severstal (SVJTF) agreed to a lower price of $300M USD payable to the principal shareholders (representing about 80% of all outstanding shares) of Western Pennsylvania coal miner PBS Coals (Toronto: PBS), while the price of C$8.30 per share to all other shareholders remains the same. The lower price tag values the deal at about $1B (USD), which is in line with the decline in coal prices, commodities, and global stock markets since the deal was originally announced in late August for $1.3B as related ETFs have plunged in value, including the Market Vectors Russia (RSX), Steel (SLX), and Coal (KOL) funds.
PBS Coals closed down 4% on Friday in Toronto at C$7.00 ahead of the agreement to close the deal, which was announced in the early morning hours on Saturday. The acquisition will provide Severstal with a source of coking coal and the company already has expansion plans to double the output of local mines, according to reports out of Moscow from Severstal's mining division chief executive. The PBS Group currently produces about 3M clean tons of bituminous coal annually and controls over 153M tons of measured and indicated coal resources with an additional 98.3M tons of contingent resources.
$11.67 (10/25/08)
