China Shenhua Energy, the country's biggest coal producer, is weighing a prospective US$4 billion bid for a controlling stake in Adaro Indonesia, the second-largest Indonesian coal producer, sources said.
Shenhua was invited earlier this year to take a small stake in Adaro before its planned listing in Jakarta next year to raise up to US$750 million but declined the offer, the sources said.
'They were holding out for more,' a person familiar with Shenhua said. The source said on the cards now would be a bid by Shenhua to take a controlling stake in the company and scrap the proposed share sale.
Alternatively, it may bid to buy out current shareholders at the time of the offering.
'I can't confirm that,' said Shenhua board secretary Huang Qing.
Adaro marketing manager Alastair Grant said some shareholders might have been approached. 'Adaro has a diverse shareholding structure and there may have been some contacts but there is nothing I have heard of,' he said.
