Peabody Energy and ArcelorMittal have extended their A$4.9 billion ($5.1 billion) takeover offer for Australia's Macarthur Coal for the third time with two of its largest shareholders yet to commit to the deal.
Peabody, the world's largest private-sector coal company and ArcelorMittal, the world's largest steelmaker, yesterday said they have extended their revised A$16 per share offer until 11 November.
As of 18 October, the companies had 22.98 per cent of Macarthur shares. They held 16.1 per cent of shares when the takeover was first proposed on 1 August through ArcelorMittal's existing stake in Macarthur.
The offer, which needs the support of majority shareholder Macarthur, who holds 50.1 per cent of shares, was trading at A$16.09 yesterday, indicating that investors are looking at a rival bid.
Although some investors are hopeful of a higher offer, analysts say that it is highly unlikely.
Macarthur's largest shareholder, China's Citic Group with 24.5 per cent stake and its third-largest shareholder, South Korea's POSCO with about 7 per cent stake, have yet to commit to the deal.
Macarthur is Australia's second-biggest coal miner and supplier of low volatile pulverised injection coal to steel mills in Asia, Europe and Brazil through its 73.3 per cent stake in Coppabella Mine and Moorvale Mine and a 74.66 per cent stake in the Middlemount Mine project.
Macarthur, which has been a takeover target in the wake of growing demand for coal (price of coal has reached record high this year), has so far fended off four takeover bids.
The current deal is likely to benefit both companies, helping Peabody increase its presence in the coal market even further while securing for ArcelorMittal increased supplies of pulverised coal, a key commodity for making steel, at competitive rates.