Macarthur Coal still hoping for rival to Peabody Energy ArcelorMittal bid - Report

Wednesday, 07 Sep 2011

The Australian reported that Macarthur Coal's board is still hoping for a higher takeover bid, despite reaffirming its recommendation of the sweetened offer of Peabody Energy and ArcelorMittal.

Mr Keith De Lacy chairman of Macarthur Coal said that "As previously advised, Macarthur had pursued discussions with third parties, which had expressed interest in putting forward a superior proposal for Macarthur's shares. The directors advise that as at today, no superior proposal has been received. Although it remains possible that a superior proposal might be made, there can be no assurances that any will emerge."

Macarthur also noted that Mr Zeng had made no recommendation or statement about the intentions of Citic Group on the takeover bid. The deal with PEAM Coal, a 60:40 JV between Peabody and ArcelorMittal, has a no shop, no talk condition, but the target's recommendation assumes the absence of a higher bid.

Macarthur also used the target statement to warn shareholders of ongoing uncertainty about the regulatory environment it operated in. It said the mining and carbon tax and land access issues could reduce profitability.

Mr De Lacy said that "By accepting the PEAM offer, Macarthur shareholders are able to crystallize cash value for their shares and remove any ongoing exposure to market, regulatory and other risks that Macarthur Coal may face in the future, assuming that the PEAM offer becomes unconditional."

Many believed a rival offer for Macarthur was likely, with 25% shareholder Citic Group the key to any alternative bid. But with no firm deal apparent, the target's board accepted Peabody and ArcelorMittal's increased price.

The USD 4.9 billion, USD 16 a share bid had been raised from the USD 15.50 offer launched on August 1st 2011.

(sourced from TheAustralian)