Peabody and Noble clash over Macarthur Coal

St. Louis, US-based Peabody Energy, the world's largest private sector coal company, on April 6 announced that it has submitted a revised takeover proposal to Australia's Macarthur Coal Limited, a leading low-volatile metallurgical coal producer. 
 
Under Peabody's new non-binding 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.
 
As SteelOrbis previously reported, under Peabody's previous proposal of last week, Macarthur shareholders would have received a cash price of AU$13 (US$11.9) per share, representing a total equity value of AU$3.3 billion (US$3 billion). This bid was 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.
 
A Peabody press release dated April 6 said that the new price represents a 44 percent premium to A$9.70 per share, the price at which Macarthur agreed to issue shares to Noble Group in relation to the Gloucester takeover offer. The new offer, however, was below Macarthur's market price, which went over AU$15, suggesting the bidding could go higher.
 
Meanwhile, Noble called the Peabody offers "opportunistic and crafty" in a press release written with humor, adding that Peabody tried to "plunk a bid down that was a great deal for them, and not, in our view, anywhere near what was already on the table."
 
As SteelOrbis previously reported, Macarthur Coal Limited 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.
 
Under Peabody's proposal, Macarthur's three largest shareholders would be offered the alternative of retaining their existing interest in Macarthur.
 
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.
 
Meanwhile, the Noble Group, which owns 87.7 percent of Gloucester Coal, offered $12.60 per share all cash offer for the company's remaining shares Noble does not already own.