Alienation of affections in Aussie coal world

Gloucester Coal Ltd is an Australian mining company that announced on February 20th its plan to merge with a another such company, Whitehaven Coal.

Noble Group, a commodity trading concern based in Hong Kong, is a 21.7% shareholder of Gloucester, and is unhappy with the deal -- in effect though not in form, it is a takeover of Glocester by Whitehaven.

Anyway, for reasons that aren't clear to me, the planned Glocester/Whitehaven transaction doesn't require shareholder approval. Noble doesn't have the opportunity, then, to duisrupt the deal through a proxy contest.

It has found another route to express its dissatisfaction, though. On February 27, Noble announced its own bid for Gloucesterm at a price of Aus$4.85 per share, advising that the proposal "is subject to the Gloucester Coal bid for Whitecastle not proceeding and certain other prescribed occurrences not occurring" (in the words of a Gloucester press release).

So far, Gloucester's response is simply "we're thinking about it." Or, rather, in press release language, they are "considering the proposal and will respond on it in due course."

Love the preposition "on" in that context? Rather than, say, "to"?

CSX Sets a date

CSX Corp., the railroad company involved in a heated political and legal dispute with the London-based hedge fund TCI, has set a date for its 2008 shareholder's meeting.

June 25, in New Orleans.

The TCI group (which also includes 3G Capital Partners Ltd.), will solicit proxies for an opposition slate of five nominees for the board.

That's not a takeover attempt, strictly speaking. There are twelve directors, and the board is unclassified -- in other words, all twelve are up for (re-)election in any given year. That the dissidents are only nominating five means that they'll be a minority (though just barely) even if all five of their nominees end up seated around that table.

This could mean either (a) they could only find five qualified nominees willing to put their names up for this purpose, or (b) they're seeking to give undecided stockholders a feeling of security and continuity by making of point of seeking only a minority position.

CSX held a conference call on April 16 to discuss its first quarter results. Looking through the transcript, I realize that one of the predictable problems faced by any railroad is that the contract prices for hauling are fixed for long periods of time -- these "legacy contracts" can lock in the prices for hauling coal for particular shippers for up to five years. That doesn't give the management a lot of room to respond to changes in their own costs.

Good thing it's their headache and not mine, I suppose.