$5.4bn the right price: Macarthur

By Brian Robins, SMH


MACARTHUR Coal has signalled it would support a takeover bid for the company if it were pitched at $18 a share, valuing the company at $5.4 billion, which is significantly higher than the present offer.

Peabody Energy and ArcelorMittal are jointly offering $15.50 cash a share, while allowing Macarthur Coal to pay a dividend of up to 16¢ a share. The takeover is conditional on winning control of 50.01 per cent of the shares on issue. The two companies already hold 17 per cent of the coalminer's capital.

Macarthur Coal yesterday said it would recommend acceptance of an offer of $18 a share if it was conditional on receiving acceptances totalling 90 per cent of the shares on issue. Without this condition, the directors would be prepared to accept a $16 a share offer.

Critically, however, CITIC Australia, which controls 23 per cent of Macarthur Coal's shares, has yet to clarify its position over a possible change of company control.

Macarthur Coal said yesterday CITIC's representative on its board, Mr Chen Zeng had not taken part in the boardroom discussions about the Peabody/ArcelorMittal takeover offer, since CITIC needs ''to carefully consider the … offer and consequential issues''.

South Korean steelmaker POSCO holds another 8 per cent of the shares, and has also yet to indicate how it will respond.

After Macarthur Coal received the initial approach from Peabody/ArcelorMittal about their planned $15.50 takeover offer, it agreed to provide the bidders with additional detailed financial information about the company's operations.

Other potential bidders have been able to access this detailed data as well, although it is unclear whether any parties are actively looking at bidding.

Macarthur Coal said yesterday ''it is in continuing discussions with a number of interested parties in relation to possible alternative proposals that may result in a superior offer'', although no guarantee can be given that a better offer will emerge.

After hitting an intraday high yesterday of $15.94, Macarthur Coal's shares closed at $15.83, up 28¢ on the day.