Coalminer RJB dumps suitor

By ROSS DAVIES
Updated:

 

Some £26m has been wiped off the stock market value of coalminer RJB as it pulled out of talks with a possible bidder, thought to be US conglomerate Renco, and the shares dropped 27% from 63 1/2p to 46 1/2p.

RJB said the potential bidder, whose name it would not disclose, had failed to meet a deadline for 'reconfirming' its interest in making an offer, or to confirm a price or the availability of finance. Market speculation had been that Renco might go to between 75p and 100p a share, leading to a recent flurry of interest in the stock.

The bidder first approached RJB in March and 'intensive' talks began in June, with RJB 'several weeks ago' setting a deadline. RJB said in a brief statement today that it had now terminated discussions.

RJB is Britain's largest coal producer, owning 13 of the 17 remaining deep mines and about 50,000 acres of land. One factor in a bid from Renco or anyone else is likely to be EU approval of a £100m British Government subsidy to the coal industry, which could save two pits and 3,000 jobs. Yet the EU is trying to phase out subsidies, and a decision is unlikely much before the end of the year.

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