Macarthur Coal backs Peabody, ArcelorMittal bid

AP News
Posted: Aug 30, 2011 7:26 AM
Macarthur Coal backs Peabody, ArcelorMittal bid

Australian miner Macarthur Coal Ltd. has recommended its shareholders accept a sweetened takeover bid from U.S energy giant Peabody Energy Corp.

Macarthur's board had previously rejected an Australian dollars 4.7 billion ($5.12 billion), or AU$15.50 per share, joint bid from St. Louis-based Peabody and Luxembourg-based steelmaker ArcelorMittal.

The revised bid from the companies _ working jointly as PEAMCoal _ is AU$16 per share. That is 44 percent higher than the stock's close of AU$11.08 per share on July 11, the day the initial takeover offer was announced.

Macarthur, one of the world's largest producers of pulverized coal, said a better bid was still possible, but there were no assurances any would emerge. The deal includes a "no-talk" limitation, meaning Macarthur is banned from talking to other potential buyers.

The takeover will give ArcelorMittal, the world's largest steelmaking company, and Peabody, the world's biggest private-sector coal producer, access to Macarthur's massive reserves of pulverized coal, a key ingredient in the making of steel.

ArcelorMittal already has a 16 percent stake in Macarthur.

The Australian company has around 270 million tons in total coal reserves and forecasts production of 3.8 million to 4 million tons for the fiscal year that ends June 30.

Shares in Macarthur were up 0.4 percent to AU$15.87 in early afternoon trading.