Universal Coal has commenced legal proceedings in the High Court of Justice of England and Wales over TerraCom’s unsolicited offer for a takeover.
The board of Universal Coal intends to ensure that all shareholders are given an equal opportunity to realise the full value of their investment in the company.
Universal Coal has worked with Deloitte Corporate Finance to evaluate the fairness of the bid to Universal shareholders.
“The bid committee has determined that the interests of the body of shareholders as a whole are best served through commencing and prosecuting the litigation,” Universal Coal stated in an ASX announcement.
This would allow Universal Coal to suspend all voting rights attributable to the shares in which TerraCom has an interest, or direct TerraCom to divest its interest in all Universal shares acquired under the takeover bid.
Universal Coal recommended shareholders to take no action in respect of the bid, despite TerraCom already receiving 51 per cent voting right to the former’s shares.
The target company preferred for a proposed transaction of a change of control to the unsolicited bid.
Universal Coal operates four thermal coal mines in South Africa, including the Kangala colliery, the New Clydesdale colliery, the North Block Complex and the Ubuntu colliery.
It also has an interest in the Eloff and Arnot South thermal coal projects and Berenice/Cygnus coking coal project in South Africa.