St. Louis, US-based Peabody Energy, the world's largest private sector coal company, on March 30 announced that it has submitted a non-binding indicative proposal to Australia's Macarthur Coal Limited, a leading low-volatile metallurgical coal producer.
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 said that, under Peabody's proposal, Macarthur shareholders would receive 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 price represents a 34 percent premium to the price of Macarthur shares to be issued to Hong Kong-based commodity supplier Noble Group as part of the previously announced transactions with Noble and its subsidiary Australia-based coal miner Gloucester Coal.
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.