Massey Shareholders Looking To Halt Sale To Alpha Natural
A group of Massey Energy (NYSE: MEE) shareholders are looking to halt the company's $7.1 billion sale to rival Alpha Natural Resources (NYSE: ANR) just a couple of days before investors are scheduled to meet to approve the deal announced in January.
Massey investors have asked the West Virginia Supreme Court of Appeals to block the deal, alleging that Massey's management team agreed to the sale to dodge personal liability for the April 2010 blast at the company's Upper Big Branch mine in West Virginia that killed 29 workers. The accident was the worst at a U.S. coal mine in nearly four decades.
Massey, the largest coal miner in Central Appalachia, is also facing a separate suit brought by the New Jersey Building Laborers Pension Fund, which also seeks to halt the sale, the Wall Street Journal reported.
Both suits were filed last year.
In the West Virginia case, plaintiffs accuse Massey of giving Alpha Natural preferential treatment in the bidding process so that the sale could be expedited. Virginia-based Alpha Natural denied the claim and said that a vigorous bidding process took place. Plaintiffs include the California State Teachers' Retirement System, the Journal reported.
A report recently released by West Virginia investigators placed the blame for the Upper Big Branch blast squarely at the feet of Massey, saying that workers at the mine were not properly trained in how to handle such a blast.
Combined, Alpha Natural and Massey would the be largest U.S. producer of metallurgical coal, the coal grade that is in high demand by Asian steelmakers.
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