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Massey shares rise on acquisition

Reuters
10:05 AM, E.T. | January 31, 2011
Energy & Resources

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Shares of coal miner Massey Energy (MEE-N) surged on Monday, the first trading day after rival Alpha Natural Resources (ANR-N) agreed to buy the company in a $7 billion deal.

In the deal announced on Saturday, Alpha agreed to buy Massey, whose shareholders will receive 1.025 Alpha share for each Massey share in addition to $10 a share in cash, for a value of about $69.33 a share. That represents a 21-percent premium over Massey's closing share price of $57.23 on Friday.

"We believe a combined company of Alpha and Massey would be a 'must own' in the coal space, accounting for roughly one-third of total U.S. metallurgical coal production," said analyst Jeremy Sussman, of Brean Murray Carret & Co.

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