Canada's Grande Cache agrees to C$1 bln buyout

Mon Oct 31, 2011

* All-cash deal for Grande Cache worth about C$1 billion
* Winsway, Marubeni to pay C$10 per Grande Cache share
* Grande Cache shares surge 66 pct on the TSX
* Deal is part of M&A wave fueled by Chinese demand

TORONTO, Oct 31 (Reuters) - Canada's Grande Cache Coal has agreed to be acquired by Winsway Coking Coal and Marubeni Corp in a C$1 billion ($1 billion) deal fueled by demand from China's steelmakers.

Hong Kong-listed Winsway -- a supplier of coking coal to Chinese steelmakers -- and Japanese trading house Marubeni will pay C$10 cash for each share of Grande Cache, a 70 percent premium to the company's closing price on Oct. 28.

The offer, announced on Monday, is part of a flurry of deal activity in the global coal industry, including Peabody Energy's $5 billion offer to buy Australia's Macarthur Coal .

Miners are scrambling to capitalize on rising demand from China and Indiaeven as uncertainty surrounds the broad economic outlook. Producers of thermal coal, used in power plants, and coking or metallurgical coal, used to make steel, have both become targets.

Grande Cache, the most actively traded stock on the TSX on Monday, was also the biggest gainer on the day, up 66 percent to C$9.77 in early trading.

The Calgary, Alberta-based coking coal miner said its board unanimously approved the deal and believes that it is in the best interest of shareholders.

Directors and officers of the company have agreed to tender their shares in favor of the deal, the company said in a statement.

The company said it won't initiate talks with any other parties about a possible business combination.

Peabody is in the process of buying Macarthur on its own after ArcelorMittal , the world's largest steelmaker, pulled out of a joint $5 billion bid.

Earlier this month, New Hope , an Australian coal miner, put itself up for auction after receiving several approaches.

(sourced Reuters)