Macarthur Coal Ltd refused an unsolicited $5.2 billion bid from a pair of industrial giants over the weekend. Peabody Energy Corp and ArcelorMittal had offered a 40% premium over the current stock market value for Macarthur Coal.
This is the second time in two years that Peabody Energy Corp has tried to buy out the coal mining firm. Peabody is trying to establish a strong presence in Australia due to the strategic advantages of having plenty of coal resources and being close by to the Asian markets.
Peabody chairman and chief executive Gregory Boyce said that Peabody and ArcelorMittal believe our bid is compelling, He added that they have decided to take this attractive offer directly to Macarthur shareholders to provide them with significant value.
Macarthur chairman Keith DeLacy said yesterday that the offer appears to be an opportunistic attempt to acquire Macarthur at a time of global economic volatility and regulatory uncertainty in Australia, and fails to reflect Macarthur's industry-leading position and the growth potential of its unique assets.
Andrew Gardner, head of commodities research at MF Global Securities Australia said that they thought there was reasonably high chance of a takeover bid of some sort proceeding--around 60% to 70%. The most probable offer price scenario to conclude a deal is somewhere in between the two proposals, such as a A$16-per-share initial offer, ratcheting up to A$17 with over 90% acceptance he added.
Other likely companies who may be ‘eyeing’ MacArthur Coal could include Xstrata, Anglo American, Rio Tinto and Vale.