Walter Energy Shares Spike on Takeover Talk

Shares of Walter Energy (NYSE:WLT) soared more than 20% Wednesday morning, fueled by a report that British miner Anglo American is weighing a takeover offer for the coal maker that would carry a hefty premium of at least 60%.

According to the London Times, Anglo American, which is headquartered in London and mines coal in Australia, South Africa and Colombia, already has financing lined up for the bid.

Anglo American is considering pulling the trigger on a $120-a-share for Birmingham, Ala.-based Walter Energy, which is a producer and exporter of metallurgical coal and other products, the paper reported. At $120, the bid would translate to a 60% premium on Walter Energys Tuesday closing price of $74.99.

According to the Times, Anglo American could boost its potential offer for Walter Energy to $150, if needed, representing a huge 100% premium.

However, London-based Liberum Capital warned Anglo American is unlikely to go forward with a takeover of Walter Energy, which has much of its mines in the southeast of the U.S.

Anglo has negligible presence in U.S. coal markets, plus landlocked U.S. coal is less exposed to export seaborne markets, Liberum wrote in a research note, Bloomberg News reported.

That warning didnt prevent shares of Walter Energy from climbing 19.10% to $89.31 at Wednesdays open. Those gains helped dull Walters 2011 tumble of more than 40%.