Peabody makes $3.3bn bid for Macarthur
Macarthur Coal Limited (MCC) confirmed Peabody Energy Corporation has offered to acquire all the shares in Macarthur for cash consideration of $13.00 per share. However, the company said its board believes the offer is not in the best interests of shareholders.
In its current form the indicative, non-binding and conditional proposal included, among other items, appropriate support being received from Macarthur's three major shareholders who collectively hold approximately 47.4% of the Macarthur register and Macarthur’s takeover bid for Gloucester Coal Limited (GCL) not proceeding.
Macarthur said it intends to proceed with the shareholder meeting scheduled for 12 April 2010 to consider the proposed issue of Macarthur Coal shares to Noble Group Limited under the takeover of 100% of Gloucester Coal and the acquisition of Noble’s interest in the Middlemount Coal joint venture.
The company said Peabody’s proposal does not represent an adequate premium to Macarthur’s recent trading prices and its average broker price target.
Macarthur’s shares were halted at $12.09 each prior to the commencement of trade today.
The company added that the outlook for coal markets has improved significantly over the past quarter, citing AME Mineral Economics recent increase to forecasts for JFY10 and JFY11 LV PCI prices.
Macarthur said it has been advised by Peabody that it has initiated discussions with Macarthur’s three major shareholders, CITIC Resources Holdings Limited, ArcelorMittal SA and POSCO, in relation to an aspect of the proposal that may provide them with an ability to retain their respective interests in a privatised Macarthur, in an unlisted entity controlled by Peabody.
However, Macarthur said it has been advised that no agreements have been entered into with those shareholders.
Peabody has indicated that disclosure of the proposal without its consent could diminish its interest in pursuing a transaction.
Chairman of Macarthur, Keith DeLacy, said the proposal is highly conditional and does not fully value Macarthur and its significant growth prospects.
“Furthermore, Macarthur believes there are numerous strategic and operational benefits in the proposed acquisitions of 100% of Gloucester and Noble’s interest in the Middlemount JV, to which it remains committed,” Mr DeLacy said.
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