Walter Energy and Western Coal Reach Merger Agreement (WLT)

Dahlman Rose issued its research report today on Walter Energy WLT after WLT and Western Coal agreed to merget at the original proposed WTN price of CAD$11.50/share. In a note to clients, Dahlman Rose writes, "Walter will pay its original bid price of CAD $11.50 per WTN share consisting off approximately 70% cash and 30% WLT shares. Western shareholders will receive 0.114 WLT shares for the equity portion of the transaction based on a 20-day weighted average USD$99.35 WLT price. The deal is expected to close in 2Q11 before which time a new CEO of the combined company will be announced. The deal requires only Western shareholder approval." Dahlman Rose maintains its Buy rating on WLT and its $110 price target. WLT is trading at $111.39.