One way to look at the merits of this transaction is to...

One way to look at the merits of this transaction is to hypothetically reverse it.

That is, assume the starting position is that Webster has no debt and is sitting on $10m cash. It then proposes to acquire Bengerang for $130m, taking the company $120m into debt.

Would this seem a wise acquisition? In my view, no. Hence the reverse - selling Bengerang - is a good move, imho.

At the time Webster acquired Bengerang I commented here that the 'new Webster' appeared to be a bit of a mess.

I never bought the 'geographic spread reduces risk' argument for acquiring Bengerang. It's hard to see many risk reduction benefits from owning properties at Burke and Garah.

It's much better, as Friday's announcement indicated, for Webster to be more geographically concentrated.  Geographic concentration increases synergies between assets. Management can then grow the business strategically from this cohesive base - and with a very strong balance sheet to underpin such growth.