Tuesday, October 19, 2010

WSJ: Massey board considering future, including possible sale of company

The nation's sixth largest coal miner, Massey Energy, is considering strategic alternatives including sale, The Wall Street Journal reports. "Massey's board of directors last week formed a committee to assess the future of the Richmond, Va., company, said one person familiar with the situation," Joann S. Lubin, Kris Maher and Anupreeta Das report for the Journal. "By mid-November, it could 'be in detailed due diligence with one of the multiple options,' that person predicted." Sources told the Journal options could include sale to another coal mining company or private-equity firm.

"We're always looking at M&A opportunities, but we never discuss them until they're complete," Shane Harvey, Massey's general counsel, told the reporters. The 98-year-old company has been embroiled in public controversy since the explosion at its Upper Big Branch mine in Montcoal, W. V., killed 29 coal miners in April. "The deaths attracted condemnation from regulators and even President Barack Obama," the reporters write. "Massey's chief executive, Don Blankenship, strongly rebutted the criticism, saying that Massey used the best of safety procedures."

Unidentified sources told the Journal Massey's board of directors is believed to be driving the move as Blankenship would prefer to keep the company independent. "Massey carries a current market capitalization of about $3.6 billion and is the largest operator in central Appalachia where it operates underground and surface mines," the reporters write. Blankenship said in September the company expected a third-quarter loss, primarily due to more stringent enforcement by federal safety regulators and other disruptions, the Journal reports. (Read more)

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