Alpha Natural Resources (NYSE:ANR) has sold its majority interest in lime manufacturing plant in Kentucky and 17.6 million tons of coal that still needs to be mined. The after-tax gain from the sale of both properties is expected to be about $15 million.
Tomorrow is the day that Cleveland-Cliffs (NYSE:CLF) gets a new name,Cliffs Natural Resources, anticipating completion of its merger withAlpha Natural Resources (NYSE:ANR). When the merger was announced inJuly, it was estimated to be worth about $10 billion. It’s nowestimated to be worth about $4 billion.
The sale doesn’t appear to have had a positive effect on traders.Alpha’s stock is down more than $2 (6%) in early morning trading. Thepending merger with Cleveland Natural Resources (NYSE:CLF) looms overeverything Alpha does. And nobody seems to like the direction of eitherin the current climate.
At $36.00 pre-market, shares are down two-thirds from the 52-week high of $119.30.
Cleveland-Cliffs just fought off an attempt by its largest shareholder, Harbinger Capital, to increase Harbinger’s ownership to more than 20%. Today, Cleveland-Cliffs announced that it has adopted a poison pill to keep the company safe from any more of that kind of trashy behavior.
Shareholders will vote in the first half of November on the merger with Alpha. Cliffs shares are off nearly 71% since the merger with Alpha was announced, and Alpha shares are down nearly 60% in the same period. This doesn’t look like the best time to complete this deal, poison pill notwithstanding.
Cleveland-Cliffs shares are down close to $32.00, down even more than Alpha Natural Resources’ drop from 52-week highs.
Paul Ausick
October 15, 2008
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