Massey Energy Co. (NYSE: MEE) is set to be acquired by Alpha Natural Resources. Massey Energy stock has reacted positively to the news and is currently trading at $62.70. The stock is up 9.56 percent from its previous close. Alpha Natural will pay $7 billion for the purchase.
* The acquisition will created the world’s third largest steel-making coal producing company.
* The deal is expected to boost Alpha’s earnings by 2012.
Alpha Natural has reported that combined company will be able to produce 28 million to 30 million tons of metallurgical coal. Such coal is in high demand from emerging economies. Massey Energy suffered massive losses on account of coal mining accident in 2010. The disaster had led to 29 deaths.
Massey Energy shareholders will receive 1.025 Alpha shares for each Massey share. The shareholders will also receive $10 for each share held. Thus, each share has been valued at about $69.33 per share. The deal price has valued the stock at 21 percent premium over its closing price on Friday. The deal announcement had positive impact on coal company stocks but has been negative for Alpha shares. Massey Energy has high reserves of metallurgical coal. About half of its 2.8 million tons of coal reserve is of metallurgical coal.
Massey Energy is engaged in the business of producing, processing and selling coal. The company is primarily active in the United States. It has 56 mines under its control, out of which, 42 are underground mines, whereas remaining 14 are surface mines. The company has its mines in Kentucky, Virginia and West Virginia. The company was formed in 1912 and is based out of Virginia.
Massey Energy stock opened at $62.98 and touched the high of $64.24, which is also its 52 weeks high. The stock’s lowest price in today’s session is $62.50. The company stock’s beta is 2.09. The company stock has traded in the range of $25.85 and $64.24 during the past 52 weeks.
Massey Energy had reported its total current assets at $1.314 billion for the year ending Dec 31, 2009. Its total assets were worth $3.799 billion for the same time period. Massey Energy had valued its total liabilities at $2.543 billion. The company had reported its revenue at $2.691 billion and its gross profit for the year at $297.473 million. Massey Energy’s net income for the year stood at $104.433 million.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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