ArcelorMittal, Peabody raise bid to see Macarthur's books

The world's largest steelmaker and the largest private-sector coal miner yesterday sweetened their offer for Macarthur Coal to A$4.73 billion ($5.05 billion), in order to take a peek into the Australian coal miner's books and conduct due diligence.

ArcelorMittal and Peabody Energy raised their offer of last week for Macarthur from $4.7 billion to $5.05 billion and gained approval to look into the books and start due diligence on the world's biggest producer of pulverised coal.

A deal was reached after the suitors agreed to improve the indicative proposal by allowing a dividend of 16 cents per share without reducing the price per share, and cut the number of conditions attached to the proposal.

"Up to 16 cents a share of any final dividend for fiscal 2011, declared by the Macarthur board, will not be deducted from the offer price," Macarthur said in a statement.

In return, Macarthur has agreed to provide due diligence and site visits to Peabody and ArcelorMittal, from 18 July 2011. All parties have agreed that should the suitors make a formal offer in the next 12 months, it would not be below $15.50 and Macarthur is free to solicit other bids.

On 11 July ArcelorMittal and Peabody made a joint A$15.50 a share or $5 billion in cash bid for Brisbane-based Macarthur, Australia's second-biggest coal miner and supplier of low volatile pulverised injection coal to steel mills in Asia, Europe and Brazil.