New Hope shares (ASX: NHC) bounced today, with a supportive coal backdrop being aided by news that the company has agreed to acquire full ownership of Malabar Resources in an all-scrip deal. Reduced Chines output for the month of September has also raised supply concerns, pushing coal names higher on the day.
The New Hope Corp share price closed out the day at A$6.18, a gain of 5.82% on the session after starting the session with a move lower to test support. The stock had been testing support below A$5.70 early on, a level that attracted firm buying interest once the deal details emerged, and coal supply concerns were raised.
Why are New Hope Corp shares higher today?
New Hope has entered into a binding Scheme Implementation Deed to acquire the 74% of unlisted Malabar Resources it does not already own, granting it 100% control of the Maxwell underground coal mine near Muswellbrook in the Upper Hunter region of New South Wales. Maxwell commenced longwall production in April and is targeting up to 5.5 million tonnes per annum (Mtpa) of saleable coal at full capacity.
The deal is structured entirely in scrip. Malabar shareholders will receive 0.500 New Hope ordinary shares for each Malabar share held, implying a value of A$2.92 per Malabar share based on New Hope’s closing price of A$5.84 on October 16. On a 100% equity basis, that values Malabar at approximately A$1.8 billion, or around A$2.4 billion on an enterprise value basis when including Malabar’s A$627 million in net debt as of June 30.
To fund the 74% acquisition, New Hope will issue approximately 227.8 million new ordinary shares worth roughly A$1.3 billion. Upon completion, existing New Hope shareholders will retain approximately 79% of the combined group, with Malabar’s non-New Hope shareholders holding the remaining 21%. The combined entity will carry a pro-forma market capitalisation of approximately A$6.3 billion.
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The strategic logic is grounded in geography and scale. Maxwell sits adjacent to New Hope’s flagship Bengalla open-cut mine, enabling meaningful operational, infrastructure, logistics, and resource blending synergies across the Upper Hunter operations. Together, the two assets create a pathway to approximately 19 Mtpa of saleable coal production, a significant step-up from New Hope’s current standalone output and one that positions the group as one of Australia’s most substantial coal producers.
What it means from here
New Hope’s management expects the transaction to be accretive to overall valuation, earnings per share, and operating cash flow once Maxwell completes its production ramp-up. The all-scrip structure preserves New Hope’s cash reserves and balance sheet flexibility, which management has indicated it intends to use partly to refinance Malabar’s existing A$627 million net debt at more favourable terms, leveraging New Hope’s stronger corporate credit profile and capital markets access.
The deal also brings board-level reinforcement. Malabar nominees Wayne Seabrook and Tony Haggarty are expected to join the New Hope Board upon completion, adding underground coal mining expertise to a board that has historically been oriented toward open-cut operations.
Transaction completion is targeted for February or March 2027, subject to approval from Malabar shareholders, the New South Wales Supreme Court, and the Japan Fair Trade Commission, the latter reflecting the significance of Japanese off-take relationships in Malabar’s commercial arrangements.
