The board of directors of the Australia-based low-volatile metallurgical coal producer Macarthur Coal Limited on May 18 announced that it does not recommend the company's shareholders to accept a takeover bid from US coal giant Peabody Energy.
Macarthur said its largest shareholder China's CITIC investment company rejected the AU$3.82 billion (US$3.44 billion) offer, lowered from AU$ 4.07 billion offered in the first place before the announcement of the controversial Australian mining tax.
As SteelOrbis previously reported, before due diligence, Peabody advised Macarthur that the new mining tax legislation proposal, which is projected to place a new tax burden on the mining sector of Australia, had to be factored into its decision, lowering its proposal shortly after the statement.
Meanwhile, Peabody Energy on the same day expressed disappointment that the board of Macarthur Coal has turned down Peabody's definitive proposal. "It is also unfortunate that one shareholder could block a proposal that would have created significant value for all Macarthur shareholders," the company said pointing at CITIC.
Both companies said that there will be no further contact between the companies regarding the transaction.