Hargreaves and UK Coal in talks

Finance

Publishing Date: 10 Mar 2010 5:01pm GMT
Author: Mining Journal

Hargreaves Services plc has confirmed that it is exploring a potential merger of its deep coal mines with UK Coal plc. The statement follows the latter company's revelation on Tuesday that it is in takeover discussions.

Hargreaves is a coal producer, but also provides haulage services, waste transportation and manufactures coke. The company in 2007 purchased the Maltby colliery in Yorkshire from UK Coal.

UK Coal recently confirmed press speculation, saying it was “at a very early stage of investigating an approach it has received which could address the group’s exposure to the volatile performance of its deep mines through a merger transaction.”

UK Coal operates four deep mines, located in central and northern England, as well as four surface mines, with a further three planned. The company is also a property developer.

Hargreaves is slightly larger in terms of market capitalisation with a value of about £191 million (US$285 million), compared with UK Coal's £176 million.

“Discussions with UK Coal are at a very early stage and there is no certainty that any transaction will result,” said Hargreaves.