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What: Shares of coal miner Massey Energy
So what: The acquisition, which would create the world's third-largest metallurgical coal company, values Massey shares around $69.33 per share, representing a 21% premium to Friday's closing price. Massey's profitability has dropped sharply since its high-profile April coal mine tragedy, but the 1.2 billion tons of metallurgical coal reserves it still boasts has many analysts applauding the deal.
Now what: For those of us who missed out on Massey, the sector should continue to see a wave of consolidation. With big coal miners rushing to keep up with voracious Chinese and Indian demand, small-cap players like International Coal and Patriot Coal seem like particularly tasty takeover targets going forward. Fools know never to buy stock based purely on a buyout possibility, but if the valuation is reasonable, it might just be a bet worth taking.
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