Walter Energy (WLT) Ticks Higher as Market Chatter Returns (BHP) (FCX)

December 6, 2012 7:19 AM EST Send to a Friend
Walter Energy (NYSE: WLT) might be the next in line for a buyout following Freeport-McMoRan's (NYSE: FCX) acquisition of McMoRan Exploration (NYSE: MMR) and Plains Exploration (NYSE: PXP) on Wednesday.

The U.K.'s DailyMail is saying that BHP Billiton (NYSE: BHP) might be interested in acquiring Walter. The DailyMail sees a bid of $55 per share coming in for the met coal giant.

Reasoning behind the chatter is that Xstrata CEO Mick Davis might be looking for a new gig following completion of Xstrata's merger with Glencore Int'l and he would be a likely candidate to replace BHP chief Marius Kloppers. Kloppers has come under criticism lately for missing out on three bids: one for Rio Tinto (NYSE: RIO), one for Rio Tinto's iron business, and a failed attempt to acquire Potash Corp. (NYSE: POT).

U.S. analysts have been saying that Walter looks undervalued following a 58 percent drop in shares this year. $55 would be a 74 percent premium to Walter's closing price of $31.66 on December 5th.

In addition to BHP, Glenstrata (the Bennifer of the mining world) might be interested in Walter following the divestiture of its 25 percent stake in Lonmin, a platinum miner.

Shares of Walter are indicated higher Thursday.


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