On April 7, the board of Australia's Macarthur Coal, a leading low-volatile metallurgical coal producer, advised that its shareholders should "take no action in regard to a revised non-binding, indicative and highly conditional proposal" from St. Louis, US-based Peabody Energy, the world's largest private sector coal company.
As SteelOrbis previously reported, under Peabody's proposal, Macarthur shareholders would receive a cash price of AU$14 (US$12.91) per share meaning AU$ 3.6 billion (US$3.27 billion) in total for all of the shares. Peabody's previous bid of AU$13 had also been rejected by Macarthur.
Macarthur controls 145 million mt of reserves and 1.3 billion mt of resources, having a production capacity of more than 5 million mt per year, with growth potential from mines in development.
As SteelOrbis previously reported, Macarthur Coal Limited had announced on February 26 that its board confirmed a bid to takeover New South Wales-based Gloucester which operates mines in the Hunter Valley. The coal producer is offering Gloucester shareholders 0.84 Macarthur shares for every one Gloucester share held or AU$8 a share. Gloucester has recommended shareholders accept Macarthur's offer.
In a company statement on April 7, the Macarthur board reiterated its position that shareholders should approve the proposed issue of Macarthur Coal shares to Noble Group Limited (Noble) under the takeover of 100 percent of Gloucester Coal Ltd, the acquisition of Noble's interest in the Middlemount Coal joint venture and the acquisition of marketing rights for Middlemount coal.
Peabody's proposal is conditional upon Macarthur's current offer to acquire Gloucester Coal and the associated Noble transactions not proceeding, and any transaction will be subject to regulatory approvals and other customary conditions.
Keith De Lacy, chairman of Macarthur, said, "Peabody's revised proposal remains highly conditional and does not fully value Macarthur and its significant growth prospects. The board have recommended the Gloucester takeover and Middlemount acquisition to shareholders and continue to believe these transactions are in the best interests of Macarthur and its shareholders."