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.CHARLESTON, W.Va. -- On April 26, 2010, then-Massey Energy CEO Don Blankenship began a much-publicized campaign to absolve his company of any blame in the deaths three weeks earlier of 29 miners at its Upper Big Branch Mine in Raleigh County.On the day after a public memorial for the miners, Blankenship and other Massey board members held a major press conference in Charleston. They offered the first glimpse of the company's strategy to place blame for the April 5 explosion on an uncontrollable burst of methane gas and on unworkable mandates from the federal Mine Safety and Health Administration.That same day, Blankenship had another important piece of business to attend to: He met with Michael Quillen, chairman of the board of Alpha Natural Resources to hear Alpha's pitch for a buyout of Massey.
Quillen told Blankenship that combining the companies would be good for stockholders, customers, employees and local communities. A Massey-Alpha merger would create "a premier leader in the coal industry from several perspectives," Quillen told Blankenship, according to a new company financial disclosure.Blankenship didn't like the idea. Massey's stock price had plummeted in the wake of the mine disaster, and Blankenship said the time wasn't right for a merger. Later that day, Blankenship called Bobby Inman, lead independent director of Massey's board, and Dan Moore, a board member, and told them he was against a deal with Alpha.The initial pitch from Quillen to Blankenship is detailed in a new U.S. Securities and Exchange Commission disclosure filed by Alpha. The 363-page document, filed with the SEC late last week, provides a timeline from Alpha's private plans to make a move for Massey to Blankenship's December 2010 retirement and January's announcement of the $8.5 billion transaction.According to the timeline, Quillen and Alpha CEO Kevin Crutchfield had begun talking to Blankenship "in the days following" the explosion "to express Alpha's concern for the UBB miners, their families and the entire Massey team regarding the UBB explosion and to offer Alpha's assistance."The timeline explains that Massey and Alpha had ongoing discussions in 2006 and 2007 about potential business combinations and even signed a formal confidentiality agreement to protect the secrecy of those talks. That agreement expired in January 2009.After the mine disaster, Alpha's interest in Massey initially appeared to be short-lived."Subsequently, on May 4, 2010, given the uncertainty surrounding the various litigation matters and investigations related to the UBB explosion, management of Alpha determined to indefinitely suspend efforts to pursue a potential business combination with Massey," the SEC filing says.But by July, Alpha was interested again. In a telephone meeting, company management pitched the idea to the board of directors, and Alpha decided to try to reopen talks with Massey.Throughout the rest of the years, Massey and Alpha had discussions at various times with at least five other companies about various deals involving joint purchases of Massey assets and operations. Those companies are identified in the SEC filing only with letter designations, such as "Company A."Blankenship continued to oppose proposals from Alpha, and to discuss potential deals with other coal producers.But Inman began his own conversations with Alpha's Crutchfield, even at one point assuring Crutchfield that a deal was possible, despite Blankenship's views.
"Throughout the course of these conversations, Admiral Inman gave Mr. Crutchfield assurances that although Mr. Blankenship questioned whether the time was right to consider a business combination, the Massey board of directors was willing to consider a business combination with Alpha or another party at an appropriate price and other terms," the SEC filing said.As talks continued, during the summer and fall of 2010, Blankenship "had informal discussions with certain members of Massey's board of directors as he contemplated retiring, having served as chairman of the board and chief executive officer of Massey for over a decade," the SEC filing said."During this same time frame, as Massey's board of directors took into consideration the environment in which Massey found itself and as it reflected upon Massey's future prospects as a stand-alone company, the board of directors assessed whether Mr. Blankenship as chairman of the board and chief executive officer provided the most viable option for Massey going forward," the filing said."In connection with these discussions, Mr. Blankenship elected to submit his resignation to Massey's board of directors," the SEC filing said.On Dec. 3, 2010, Massey announced that Blankenship was retiring. Eight weeks later, Alpha and Massey issued a joint statement announcing the buyout.Reach Ken Ward Jr. at firstname.lastname@example.org or 304-348-1702.