Aston Resources Ltd. is expected to begin a global bookbuild Tuesday or Wednesday for an initial public offering of shares that will value the coal miner around A$1.5 billion, a person familiar with the matter said Thursday, now that two cornerstone investors for the deal have been secured.

Presumably, the float is being timed to capitalize on strong demand for Australian coal assets, which have attracted takeover offers together worth more than US$6 billion so far this year. It's the first major IPO to test the Australian market since a few disappointing floats late last year left the primary market all but shut.

Asian commodities traders Noble Group Ltd. (N21.SG) and Itochu Corp. (ITOCY) have agreed to become cornerstone investors in Aston, the person said. Combined, the pair will take an up to A$100 million stake in Aston. Mining magnate Nathan Tinkler plans to sell just 15%-20% of his position in Aston, the person said, leaving a float of about A$400 million in size to be marketed to investors.

Post-IPO, Tinkler will have a roughly 40% stake in the Brisbane-based company. Hong Kong-based investor Noonday Asset Management, which currently holds roughly 37% of Aston, will hold 27%.

Tinkler, the owner of Aston, bought the Maules Creek coal deposit for US$480 million in February. Maules Creek, located in the Australian state of New South Wales, which will produce metallurgical and thermal coal, is Aston's key asset.

During Aston's negotiations for a cornerstone investor, Anglo-Swiss mining giant Xstrata PLC (XTA.LN) and U.S. coal miner Peabody Energy Corp. (BTU) were both interested in buying Aston, the person familiar with the deal said, but Aston's management decided to grant stakes to cornerstone investors instead of opting for an outright sale. Xstrata and Peabody could be interested in taking shares in the IPO, the person said.

The interest shows that Xstrata and Peabody are still sniffing around the Australian market in the wake of the aborted takeover of MacArthur Coal Ltd. (MCC.AU).

Earlier this year, a takeover battle for MacArthur turned into a bidding war attracting interest from Peabody, Xstrata and New Hope Corp.(NHC.AU). But the proposed resource super profits tax threw water on that deal and all of the potential bidders walked away.

Since then the proposed tax has been blunted and Thai miner Banpu PCL (BANPU.TH) this month bid for Centennial Coal Co. (CEY.AU). Last year, China's Yanzhou bought coal miner Felix Resources Ltd. in the biggest Chinese takeover of an Australian company for A$3.54 billion.

Data from Dealogic released earlier this month shows that US$6.6 billion in Australian coal company takeover offers made in the January-June period is higher than the total value of transactions completed in any of the previous four years.

IPO activity, however, has stalled.

Most recently, Bilfinger Berger AG (GBF.XE) was marketing its Australian construction business to raise up to A$1.39 billion but that deal, which was being viewed as a bellwether for the nation's IPO market, was pulled earlier this month because of adverse market conditions.

The last large IPO, for department store Myer Group Holdings, (MYR.AU), is currently trading 16% below its offer price compared to a 2.5% fall in the broader market since Myer listed in November.

-By Cynthia Koons and Ross Kelly, Dow Jones Newswires; 61-2-8272-4691; cynthia.koons@dowjones.com
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