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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.