Whitehaven Coal (ASX:WHC) Ltd has secured the rights to purchase two substantial Queensland coal mines from BHP (ASX:BHP), in a deal estimated to be worth $3 billion. The acquisition comes despite stern opposition from one of Whitehaven's major shareholders, UK-based Bell Rock Capital.
BHP announced Whitehaven as the preferred bidder for its Daunia and Blackwater coal mines as part of the company's strategy to divest some of its Queensland coal assets. Whitehaven's shares are currently suspended, awaiting an official announcement.
Bell Rock Capital has been vocal against the acquisition, lobbying for capital to be returned to shareholders rather than being used for what it deems "risky" investments.
Bell Rock Capital chief investment officer Mike O'Mara stressed that the deal "must be a clear positive for shareholder value”. He added that it's imperative for Whitehaven's shareholders to vote on the transaction since the company had not provided any pre-deal information.
Last week, Bell Rock Capital initiated an advertising campaign against Whitehaven, accusing the company of value destruction through risky investments. Furthermore, the investment firm has called upon shareholders to reject proposed executive salary packages in the upcoming annual general meeting slated for October 26.
While the firm holds just under 5% of Whitehaven, it has criticised the company for its 36% share price slump over the past year, along with what it describes as excessive remuneration for its chief executive Paul Flynn.
The acquisition highlights the tensions between companies seeking growth through acquisitions and shareholders increasingly cautious about the strategic direction and financial prudence of such deals.