Massey Energy Company (MEE)

[OilStockReport]

In the past month several companies in the coal market have become the subject of Merger and Acquisition speculation. As companies get larger and experience diminishing returns in their core business, they are showing their willingness to utilize their large resource pools to acquire smaller companies in a race to diversify themselves. Given the limited opportunities for meaningful acquisitions, the companies in stronger financial positions, and the willingness to act, stand to gain the most from such activities.

Recently the board of directors of Massey Energy formed a committee to consider options for the company, which could include sale of the firm or remaining independent. Stifel Nicolaus & Co. analyst Paul Massoud noted that the coal miner could draw a price of $62 a share in a hypothetical offer by Cliffs Natural Resources Inc. Massoud thinks Cliffs would be interested to expand in central Appalachian coal development, and has said it would "consider opportunities."