By Sarah-Jane Tasker, The Australian
US coal giant Peabody Energy is confident of securing control of Macarthur Coal and further expanding its Australian operations, which have significantly boosted its quarterly earnings on the back of higher prices.
Chairman and chief executive, Greg Boyce, discussing the company's second-quarter results yesterday, said partnering with Macarthur's 16-per cent shareholder, ArcelorMittal, in the $4.7 billion bid for Macarthur, increased the chances of the offer succeeding.
"It bolsters our chances very significantly of being very successful on this bid," Mr Boyce told Wall Street analysts.
"We only need to get 50 per cent of the shareholders to take control of Macarthur and we start with 16 per cent, meaning we really have to get another 34 per cent, which is about 60 per cent of the free float that is available. So it is a strong partnership for us."
Peabody president Richard Navarre said the company hoped to complete due diligence on the Queensland coal target in the next week and a half.
"We started site visits this week. We have moved on from there," he said.
Peabody's move on Macarthur came the day after Julia Gillard announced the details of the controversial carbon tax, adding weight to the government's argument the proposal would not dent investment in the coal sector.
Mr Boyce said the energy giant's offer for Macarthur had already factored in the carbon tax and the minerals resources rent tax (MRRT).
"We have incorporated forward views of carbon pricing, as well as the MRRT, in terms of where we're at with Macarthur. So our due diligence that we're doing now is on the operating and business context, not the impacts of those (taxes)," Mr Boyce said.
However, he went on to say that he remained " very strongly opposed to the carbon tax".
"We don't think it's the right policy framework to move forward with. But in terms of specific numbers, it's too early to really come out with any modelled impacts on a specific basis."
Peabody announced strong quarterly results. Second-quarter earnings before interest, tax, depreciation and amortisation were up 32 per cent from the previous year to $US579.5 million ($539.5m), while revenue jumped 21 per cent to $US2 billion.
Executive vice-president Mike Crews said Australia had led the way with a 69 per cent increase in EBITDA. The company also said its Australian operations contributed more than 60 per cent of Peabody's mining EBITDA in the second quarter.
Mr Navarre said historic prices for coal were being supported by supply constraints, some of which had been caused by the severe flooding in Queensland's coal regions earlier this year.
US coal giant Peabody Energy is confident of securing control of Macarthur Coal and further expanding its Australian operations, which have significantly boosted its quarterly earnings on the back of higher prices.
Chairman and chief executive, Greg Boyce, discussing the company's second-quarter results yesterday, said partnering with Macarthur's 16-per cent shareholder, ArcelorMittal, in the $4.7 billion bid for Macarthur, increased the chances of the offer succeeding.
"It bolsters our chances very significantly of being very successful on this bid," Mr Boyce told Wall Street analysts.
"We only need to get 50 per cent of the shareholders to take control of Macarthur and we start with 16 per cent, meaning we really have to get another 34 per cent, which is about 60 per cent of the free float that is available. So it is a strong partnership for us."
Peabody president Richard Navarre said the company hoped to complete due diligence on the Queensland coal target in the next week and a half.
"We started site visits this week. We have moved on from there," he said.
Peabody's move on Macarthur came the day after Julia Gillard announced the details of the controversial carbon tax, adding weight to the government's argument the proposal would not dent investment in the coal sector.
Mr Boyce said the energy giant's offer for Macarthur had already factored in the carbon tax and the minerals resources rent tax (MRRT).
"We have incorporated forward views of carbon pricing, as well as the MRRT, in terms of where we're at with Macarthur. So our due diligence that we're doing now is on the operating and business context, not the impacts of those (taxes)," Mr Boyce said.
However, he went on to say that he remained " very strongly opposed to the carbon tax".
"We don't think it's the right policy framework to move forward with. But in terms of specific numbers, it's too early to really come out with any modelled impacts on a specific basis."
Peabody announced strong quarterly results. Second-quarter earnings before interest, tax, depreciation and amortisation were up 32 per cent from the previous year to $US579.5 million ($539.5m), while revenue jumped 21 per cent to $US2 billion.
Executive vice-president Mike Crews said Australia had led the way with a 69 per cent increase in EBITDA. The company also said its Australian operations contributed more than 60 per cent of Peabody's mining EBITDA in the second quarter.
Mr Navarre said historic prices for coal were being supported by supply constraints, some of which had been caused by the severe flooding in Queensland's coal regions earlier this year.
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