Consol Energy Inc., which owns more than 80 percent of the shares of CNX Gas Corporation has withdrawn its offer to purchase the remaining shares. The Upper St. Clair coal giant said that the shareholders of CNX were seeking too high a share price, and that current stock market volatility made it difficult to gauge CNX's true value.

"Energy markets have been swinging up and down a lot," said Consol spokesman Thomas F. Hoffman, "it was hard to see where we were going to come out at the end of the day."

Consol said that it intends to hold on to its 81.7 percent stake in CNX, and to make smaller purchases of the methane gas producer's stock "from time to time."

And another buyout offer remains a possibility.

"I think that we would always be in a position to take a run at it at a later date," Mr. Hoffman said.

CNX's board of directors expressed caution when Consol first announced its buyout intentions during its fourth-quarter conference call Jan. 28, asking shareholders to take no action until the board had thoroughly reviewed the deal.

For those who did not want to sell, waiting proved to be an effective strategy. When Consol made its all-stock offer of 0.4425 of one share of its common stock for each share of CNX common stock, it translated to a price of $33.70 per CNX share, giving CNX shareholders a 12 percent premium. But that premium shrank as Consol's shares fell in price while those of CNX rose. By Monday's close, it had disappeared completely -- with Consol's share price at $64.97, the offer valued CNX's shares at $28.74, more than 13 percent below CNX's close of $33.25.

Consol closed yesterday at $68.26, CNX Gas at $32.02.

Elwin Green can be reached at egreen@post-gazette.com or 412-263-1969. By Elwin Green

Pittsburgh Post-Gazette

Consol Energy Inc., which owns more than 80 percent of the shares of CNX Gas Corporation has withdrawn its offer to purchase the remaining shares. The Upper St. Clair coal giant said that the shareholders of CNX were seeking too high a share price, and that current stock market volatility made it difficult to gauge CNX's true value.

"Energy markets have been swinging up and down a lot," said Consol spokesman Thomas F. Hoffman, "it was hard to see where we were going to come out at the end of the day."

Consol said that it intends to hold on to its 81.7 percent stake in CNX, and to make smaller purchases of the methane gas producer's stock "from time to time."

And another buyout offer remains a possibility.

"I think that we would always be in a position to take a run at it at a later date," Mr. Hoffman said.

CNX's board of directors expressed caution when Consol first announced its buyout intentions during its fourth-quarter conference call Jan. 28, asking shareholders to take no action until the board had thoroughly reviewed the deal.

For those who did not want to sell, waiting proved to be an effective strategy. When Consol made its all-stock offer of 0.4425 of one share of its common stock for each share of CNX common stock, it translated to a price of $33.70 per CNX share, giving CNX shareholders a 12 percent premium. But that premium shrank as Consol's shares fell in price while those of CNX rose. By Monday's close, it had disappeared completely -- with Consol's share price at $64.97, the offer valued CNX's shares at $28.74, more than 13 percent below CNX's close of $33.25.

Consol closed yesterday at $68.26, CNX Gas at $32.02.