New Hope has agreed to acquire the Malabar shares it does not already own in an all-scrip deal valuing Malabar at about A$1.8 billion. The transaction would give New Hope full control of the ramping Maxwell underground mine and create a coal group targeting roughly 19Mtpa of saleable production.
- 0.500 New Hope shares for each Malabar share
- A$2.92 implied value based on New Hope’s 16 October close
- Approximately 227.8 million New Hope shares to be issued
- Malabar shareholders to own about 21% of the combined group
- Completion targeted for February or March 2027
New Hope Corporation Limited (ASX:NHC) is moving to take full ownership of the Maxwell underground coal mine in a deal that values Malabar Resources at approximately A$1.8 billion. The all-scrip scheme would add a mine already producing longwall coal to New Hope’s portfolio, while leaving Malabar shareholders with about 21% of the enlarged ASX-listed group.
New Hope, which already owns roughly 26% of Malabar, will offer 0.500 New Hope shares for every Malabar share it does not hold. Based on New Hope’s closing price of A$5.84 on 16 October, the offer implies A$2.92 per Malabar share and requires the issue of approximately 227.8 million New Hope shares. The implied value will move with New Hope’s share price, making this a share-price-linked transaction rather than a fixed cash bid.
Maxwell moves to the centre of New Hope’s growth plan
Maxwell commenced longwall production in April 2026 and is being ramped up in stages. The mine currently targets up to approximately 3Mtpa from a 145-metre face, with expansion toward a 300-metre face supporting longwall production of up to 5.0Mtpa. Combined with the bord-and-pillar operation, targeted saleable production is up to 5.5Mtpa.
The mine is approved to extract up to 8Mtpa of run-of-mine coal over 20 years and has existing coal handling, processing, stockpile, rail and port infrastructure. Malabar also reports 2,320Mt of coal resources across Maxwell, Maxwell North and Maxwell West, although the companies caution that resource information has not been independently verified in all instances. The deal therefore brings both an operating asset and a sizeable, partly undeveloped resource platform into New Hope’s ownership.
That resource expansion sits alongside New Hope’s recently reported 2.96 billion tonne resource base, although the two figures should not be treated as equivalent measures without considering ownership, classification and project status. The presentation says the combined group could reach approximately 18.9Mtpa of attributable saleable production at steady state, compared with New Hope’s standalone operations at present, but labels the forward figures indicative rather than a forecast.
All-scrip structure preserves balance-sheet capacity
New Hope says the all-share structure is intended to preserve its balance-sheet strength while providing access to Maxwell’s future production. The companies put the combined group’s pro forma market capitalisation at about A$6.3 billion, with New Hope shareholders owning roughly 79% and Malabar shareholders other than New Hope owning roughly 21%.
The transaction also contemplates refinancing Malabar’s existing debt after completion. The presentation identifies approximately A$840 million of pro forma cash and about 3% net gearing, while the announcement puts Malabar’s net debt at approximately A$627 million as at 30 June 2026. New Hope has pointed to possible efficiencies across operations, logistics, blending, marketing, procurement, financing and corporate functions, but no quantified synergy target was disclosed in the announcement.
Approval process leaves several gates ahead
The Malabar Board, excluding New Hope nominee Rob Bishop, unanimously recommends the scheme subject to an Independent Expert concluding that it is in the best interests of eligible Malabar shareholders and no superior proposal emerging. Directors other than Bishop collectively hold about 13% of Malabar on a fully diluted basis and intend to vote in favour, subject to the same qualifications.
The proposal still requires the statutory shareholder thresholds, Court approval, an Independent Expert’s report, regulatory clearances including approval from the Japan Fair Trade Commission, and other customary conditions. Malabar is subject to no-shop, no-talk and no-due-diligence restrictions, with exceptions for fiduciary duties and a matching-right process. Reciprocal break fees of A$17.4 million apply in specified circumstances.
If the scheme proceeds, Malabar executive chairman Wayne Seabrook and director Tony Haggarty are expected to join the New Hope Board. Implementation is targeted for February or March 2027, but the more immediate milestones are the Scheme Booklet and Independent Expert’s report, followed by the Malabar shareholder vote. The central question is whether Maxwell’s production ramp-up and the promised regional synergies arrive quickly enough to justify the dilution and integration work embedded in the deal.
Bottom Line?
The strategic prize is clear, but value now turns on Maxwell’s ramp-up, the eventual refinancing terms and whether the proposed synergies can be delivered without delaying production.
Questions in the middle?
- Will the Independent Expert regard the A$2.92 implied consideration as fair once Maxwell’s ramp-up risks and New Hope’s share-price exposure are assessed?
- Can Maxwell reach its targeted production levels while New Hope integrates the asset and refinances Malabar’s debt?
- Will regulators or a competing proposal alter the timetable, terms or ownership split before the shareholder vote?