The South Australian coal explorer was not part of Yanzhou Coal Mining’s recent takeover of Felix, and management had previously flagged a 5c per share public listing of the company.

Under the deal, White will issue 15.7 million of its ordinary shares to SACL shareholders.

The $A39.3 million offer values SACL shares at almost 2c each based on a White share price of $2.50.

SACL shareholders could also receive up to 17 million White shares if certain exploration targets are met.

If the takeover is successful, former Felix managing director Flannery will become the new chief executive of White, while former Felix chairman Duncan will become White’s new chairman.

Former Felix board members Hans Mende and John Kinghorn will also join White’s board in non-executive roles.

Duncan, Flannery and Kinghorn also plan to invest $75 million in White shares at $2.50 each while Mende intends to invest $19.3 million.

Part of the takeover bid is a separate SACL subscription offer to all of the explorer’s shareholders which is expected to raise up to $50.6 million.

SACL’s Lake Phillipson coal deposit has 515 million tonnes of sub-bituminous coal resources while White’s patented process upgrades this type of coal into a higher energy, more stable and cleaner burning coal briquette.

“This is a game-changing deal for White Energy and its shareholders. Bringing the two companies together increases the size, scope and diversity of White Energy’s operations and provides greater access to the execution skills required for White Energy to realise its significant potential in a growing global coal market,” White chairman John McGuigan said.

White said there was a limited cash alternative as part of its takeover bid.

Coal from SACL’s resource in EL3386 could be transported to the Adelaide-Darwin rail line and exported through ports at Darwin, Adelaide and Whyalla.

White shares are up 16% to $3.48 since the announcement yesterday.