Australia's Macarthur Coal meets forecasts, in bid talks

Aug24, 2011

* Says bid talks may yield better offer
* Year operating profit inches up after floods
* Warns costs to go up 15% in FY2012 on flood impact
* Shares hold 0.8% above bid

MELBOURNE, Aug 24 (Reuters) - Australia's Macarthur Coal , facing a $5 billion takeover offer, is in talks on potential counteroffers, it said on Wednesday, after meeting forecasts for a slight increase in annual operating profit as it was hit by floods.

Peabody Energy and ArcelorMittal have made a A$15.50 a share offer, which Macarthur is due to respond to by the end of next week. Any white knights would have to show their hands by then.

"Macarthur notes that it is in continuing discussions with a number of interested parties in relation to possible alternative proposals that may result in a superior offer to shareholders," the company said.

Anglo American is studying Macarthur's books for a possible counterbid, sources familiar with the matter have said. However, sources played down media reports of a possible tie-up between Anglo and China's Citic Group, Macarthur's top shareholder with a 24.5 percent stake.

Macarthur's shares closed at A$15.62 on Tuesday, less than 1 percent above the offer price, suggesting investors doubt a higher offer will emerge.

It declared a final dividend of 16 cents a share, in line with Peabody and ArcelorMittal's offer, which was to be reduced by the amount above 16 cents.

Macarthur's profit before one-offs rose to A$142.4 million ($149 million) for the year to June from A$139.1 million a year earlier. That compared with analysts' forecasts around A$144.6 million, according to Thomson Reuters I/B/E/S.

Its second half profit was hit by a five-month disruption to coal production after heavy rains and flooding in Queensland, saved only by record prices for coal used in steel-making.

Macarthur warned output at two of its mines would take some time to return to normal due to water discharge restrictions, and operating costs would rise by 15 percent to $115 per tonne in the year ahead as it restored the pits to normal.

Macarthur's net profit including the sell down of its Middlemount and Codrilla stakes nearly doubled to A$241.4 million.