Walter Energy (NYSE:WLT) May Merge with Western Coal (TSE:WTN)

Walter Energy's (NYSE:WLT) announcement they are making a bid for Western Coal (TSE:WTN) didn't impress the market that much, although FBR Capital likes the met coal play they would bring to Walter if the deal ends up going through.

FBR said, "This morning, news broke that Walter Energy is potentially merging with Canadian met coal producer Western Coal for CN$11.50 per share of cash and stock, a 56% premium to yesterday's close. Western brings with it a nice met coal growth profile through calendar year 2012 (fiscal ends March 31), a declining cost structure, port access at Ridley, and a new and dynamic management team...We have had several days with Western Coal's management at its analyst days and also note that several U.S. executives mention Western as a good candidate for a combination."

Walter was trading at $93.94, losing $0.77, or 0.81 percent at 11:59 AM EST. FBR maintains their "Outperform" rating on them and a price target of $98.