* Completing due diligence next week
* Confident of Australian shareholder approval
* Shares up slightly
NEW YORK, July 19 (Reuters) - U.S. coal miner Peabody Energy Corp (BTU.N: Quote) is confident of winning Australian shareholder approval in its joint $5 billion bid for Australia's Macarthur Coal (MCC.AX: Quote), company President Rick Navarre said on Tuesday.
He told Wall Street analysts on a conference call that Peabody and European steelmaker ArcelorMittal (ISPA.AS: Quote) (MT.N: Quote) expect to complete the due diligence examination of Macarthur's books next week.
"I think it is just a good fit for us to work together," Navarre said of the collaboration with the steelmaker which owns 16 percent of Macarthur shares.
"As it relates to Macarthur, they are already a 16 percent shareholder (so) it bolsters our chances very significantly of being very successful on this bid.
"We only need to get 50 percent of the shareholders to take control of Macarthur and we start with 16 percent, meaning we really have to get another 34 percent, which is about 60 percent of the free float that is available," Navarre said.
During the call to discuss Peabody's second-quarter earnings which beat analysts' expectations, Navarre said it made sense to partner with ArcelorMittal -- the world's largest steelmaker --- to acquire more reserves of metallurgical, or coking coal a key raw material for steel manufacture.
"Obviously, there is a shortage of coking coal around the globe, and I think it is just a natural fit between Peabody (and ArcelorMittal) as we expand our position in coking coal, (and) as they continue to try to lock in secure supply."
Peabody's Chairman and Chief Executive Officer Gregory Boyce said the company's strategy was to expand in the regions that serve the fastest growing markets, such as Asia, through organic growth, joint ventures and acquisitions.
"We like Macarthur's asset base... and we believe our operating, commercial and project management skills would be a good fit for Macarthur's active mines and growth potential."
He said in addition to acquisitions, Peabody will expand its Australian production to 35 million to 40 million tons by 2014-2015 from the current 28 million to 30 million tons.
The first expansion will be completed in the fourth quarter at its Wilpinjong Mine and additional increases in production are slated over the next several years. Also, Peabody has agreed to buy the remaining 5 percent of the Burton Mine.
Boyce noted Peabody was recently selected by the Mongolian government as part of a consortium to develop the Western bloc of the Tavan Tolgoi coalfield, along with a Russian railway group. And the company is also pursuing development of a 50-million ton per year surface mine in China in partnership with the Xinjiang Uygur provincial government.
Shares of Peabody were up 1.4 percent at $60.74 in late afternoon trade on the New York Stock Exchange.
(soured Reuters)
* Confident of Australian shareholder approval
* Shares up slightly
NEW YORK, July 19 (Reuters) - U.S. coal miner Peabody Energy Corp (BTU.N: Quote) is confident of winning Australian shareholder approval in its joint $5 billion bid for Australia's Macarthur Coal (MCC.AX: Quote), company President Rick Navarre said on Tuesday.
He told Wall Street analysts on a conference call that Peabody and European steelmaker ArcelorMittal (ISPA.AS: Quote) (MT.N: Quote) expect to complete the due diligence examination of Macarthur's books next week.
"I think it is just a good fit for us to work together," Navarre said of the collaboration with the steelmaker which owns 16 percent of Macarthur shares.
"As it relates to Macarthur, they are already a 16 percent shareholder (so) it bolsters our chances very significantly of being very successful on this bid.
"We only need to get 50 percent of the shareholders to take control of Macarthur and we start with 16 percent, meaning we really have to get another 34 percent, which is about 60 percent of the free float that is available," Navarre said.
During the call to discuss Peabody's second-quarter earnings which beat analysts' expectations, Navarre said it made sense to partner with ArcelorMittal -- the world's largest steelmaker --- to acquire more reserves of metallurgical, or coking coal a key raw material for steel manufacture.
"Obviously, there is a shortage of coking coal around the globe, and I think it is just a natural fit between Peabody (and ArcelorMittal) as we expand our position in coking coal, (and) as they continue to try to lock in secure supply."
Peabody's Chairman and Chief Executive Officer Gregory Boyce said the company's strategy was to expand in the regions that serve the fastest growing markets, such as Asia, through organic growth, joint ventures and acquisitions.
"We like Macarthur's asset base... and we believe our operating, commercial and project management skills would be a good fit for Macarthur's active mines and growth potential."
He said in addition to acquisitions, Peabody will expand its Australian production to 35 million to 40 million tons by 2014-2015 from the current 28 million to 30 million tons.
The first expansion will be completed in the fourth quarter at its Wilpinjong Mine and additional increases in production are slated over the next several years. Also, Peabody has agreed to buy the remaining 5 percent of the Burton Mine.
Boyce noted Peabody was recently selected by the Mongolian government as part of a consortium to develop the Western bloc of the Tavan Tolgoi coalfield, along with a Russian railway group. And the company is also pursuing development of a 50-million ton per year surface mine in China in partnership with the Xinjiang Uygur provincial government.
Shares of Peabody were up 1.4 percent at $60.74 in late afternoon trade on the New York Stock Exchange.
(soured Reuters)
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