Massey Energy's (NYSE:MEE) board of directors announced Monday they've began an official sales process, although there are no guarantees at this time the company will be sold and no targeted date to get the job done.
FBR said, "Last night after the close, Massey board announced an official sale process with no timetable set and guarantee of a sale. We had downgraded the stock yesterday morning due to limited upside for new MEE buyers and upside capped due to Friday evenings new PPOV list released (with more to come). We also believe that the company would be successful in a sale process and that's why we raised our target price as well.
"We believe the met coal is very tight and known but believe the steam coal prices are poised to rise, as Chinese and other international steam coal prices have been rising, Newcastle ships queues lengthen. After a lackluster steam export year, we expect the stage is set for 2011 US steam coal exports will rise meaningfully and US utilities will have to search other basins to contract coal in 2H11. The coal stocks have performed very well over the past four months driven by a solid broader market (QE2), rising met and steam coal prices, and increased consolidation activity. Our trip to Australia highlighted the high pace of financing activity sponsored by Indian and Chinese coal buyers trying to bridge the expected coal shortfall over the next 3-5 years."
Massey is trading at $49.11, dropping $1.41, or 2.79 percent at 11:57 AM EST.
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