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(Adds share move, company comment, analyst comments)
SYDNEY/SHANGHAI, March 24 (Reuters) - China's Yanzhou Coal Mining Company Ltd
Yancoal shares dropped 14.1 percent after the announcement to an all-time low of A$0.55. They have shed a total of 23 percent since the Yanzhou announced its offer in July last year.
Yanzhou, the Chinese state-owned company which owns 78 percent of Yanzhou, notified the Australian company it "no longer wishes to pursue" the proposal, Yancoal said.
"It was something they are exploring and they have come to an end of whatever pressures they have," Yancoal spokesman Greg Foulis said, declining to comment further.
Yanzhou representatives were not immediately available to comment.
Yanzhou had offered to buy the remainder of Yancoal Australia for A$0.91 per share, taking the company private in a deal valued at A$905 million ($822.60 million).
Yanzhou's decision to drop the offer comes after its 2013 net profit tumbled nearly 80 percent from a year ago to 1.27 billion yuan ($204 million), due to falling coal prices and depreciation in the Australian dollar.
Analysts said rising production costs and poor profits had weakened Yanzhou Coal's balance sheet, with the firm's gross debt-to-equity gearing reaching 137 percent in 2013, up from 90 percent last year.
Yanzhou's bid to buy the remaining Yancoal shares cleared foreign investment regulatory hurdles late last year.
"It's probably caused by the broader perception of what's happening in that (coal) sector," David Lennox, a resources analyst at Fat Prophets in Sydney, said of the decision.
Yanzhou's shares climbed 2.21 percent on Monday, versus a 0.49 percent gain on the Shanghai Composite Index
(Reporting by Maggie Lu Yueyang and Fayen Wong; Editing by Stephen Coates)
((maggie.luyueyang@thomsonreuters.com)(+61 2 93731819)(Reuters Messaging: maggie.luyueyang.thomsonreuters.com@reuters.net))
Keywords: AUSTRALIA YANCOAL/