Raising Noble's ire

Hong Kong-based commodity giant Noble Group is particularly unimpressed with Gloucester Coal's decision to announce a merger with Whitehaven Coal without first consulting the 21.7 per cent shareholder.

An announcement by Noble, released out of Hong Kong today, throws a spanner in the works of what otherwise appeared to be a very straightforward-looking deal (see Gloucester finds its haven, February 20). The team from UBS advising Gloucester, and Grant Samuel plus Wilson HTM advising Whitehaven, will now have their work cut out for them.

Noble expressed "serious concerns" in its release, saying it was "not informed or consulted by Gloucester's board of directors prior to the merger announcement". Noble said it was particularly concerned about the structure of the merger, effectively a reverse takeover, which would prevent any possible contest for control of Gloucester.

There has been some speculation that the move was effectively a poison pill to prevent Noble from taking over Gloucester for itself. In 2007, a $391 million cash takeover bid from another commodity trading house, Xstrata, was stymied when Noble bought its blocking stake.

"In our view this reverse takeover of Gloucester eliminates the opportunity for shareholders to opine on the future directions of the company, a direction which could deliver substantially more value for all Gloucester shareholders," said Noble Energy director William Randall.

"All Gloucester shareholders should have a real say in whether there is a change of control of Gloucester, and whether the terms being proposed are really good enough for Gloucester shareholders to hand over control of such valuable assets."

Noble's Taipan Richard Elman, who has his office at 38 Gloucester Road, Hong Kong, is also believed to be not amused. Elman built Noble from scratch after landing in Asia from England in the mid 1960s.

Noble now has operations at 80 offices across 35 countries. It also owns the unlisted Donaldson Coal in the Hunter Valley, which Macquarie was mandated to float last year. In November 2008, Noble sold its stake in iron ore miner Portland to American producer Cleveland Cliffs for $144.1 million and earlier in the year it helped arrange Windimurra Vanadium's $US127.5 million round of debt financing.

Considering Windimurra's voluntary administration last week – presaged by a stoush between a number of investors and Noble, which wanted to re-price its off-take agreement – the bad news is piling up for Noble, geared as it is to commodity prices and China's economic growth.

Noble's Australian spokesman was unable to confirm who at this stage was advising for the group, but HSBC has acted for Noble on corporate matters in the past.

Campbell Stewart leads the UBS team advising Gloucester, assisted by Freehills M&A partner Tony Damian advising on the legals. Doug Bartlett and Atagn Bensan from Grant Samuel and Wayne Seabrook from Wilson HTM lead the Whitehaven advisory team, along with Damien Clarke from law firm McCullough Roberts in Brisbane.