After the markets closed on Friday, the board of directors of Massey Energy Co. (NYSE: MEE) issued a press release announcing that its long-time board chairman and CEO, Don Blankenship, “will retire from the company effective December 30, 2010.” The company issued a correction almost immediately, changing the date to December 31st, and clarifying that although that was the official date, new CEO Baxter Phillips Jr. was on the job effective December 3rd.
The wording of the press release from Massey leaves little doubt that Blankenship was forced out. Does anyone really think that Blankenship believes it when he says “it is time for me to move on?” To believe that one would have to believe in a medical procedure akin to a personality transplant.
Massey’s board clearly came to the conclusion that Blankenship’s prickly dealings with regulators and his rejection of merging Massey with another company were not in the best interests of Massey’s shareholders. Blankenship opposed being acquired because that would have cost him his job. He also opposed acquiring another company, believing — probably correctly — that he would not last as CEO in that scenario either.
Time will tell if firing Blankenship was the right decision, but at least Massey’s board was willing to make it. That alone deserves kudos.
And now, apparently, rather than simply sitting around, the company is reported to be interested in acquiring another company rather than waiting to be acquired itself. The Wall Street Journal cites “people familiar with the matter” as its source that Massey may consider buying another coal company.
Massey has talked with Alpha Natural Resources Inc. (NYSE: ANR) about being acquired, and ArcelorMittal (NYSE: MT), Arch Coal Inc. (NYSE: ACI), and Consol Energy Ind. (NYSE: CNX) could also be in the hunt to acquire Massey. The WSJ cites an analyst at FBR Capital as suggesting that International Coal Group Inc. (NYSE: ICO) and Patriot Coal Corp. (NYSE: PCX) may be reverse-takeover targets.
Massey’s shares are up more than 3% in early trading today on heavy volume. Without Blankenship, the company has a lot more options.
Paul Ausick
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