Macarthur Coal rejects Peabody, ArcelorMittal's $5.2 -bn takeover bid
01 August 2011
Australia's Macarthur Coal today rejected a $5.2-billion joint takeover bid by Peabody Energy and ArcelorMittal as "opportunistic" and said that it was talking to other suitors.
The rejection came after Peabody Energy, the world's largest private-sector coal company and ArcelorMittal, the world's largest steelmaker, which already holds a 16-per cent stake in Macarthur, had been conducted due diligence for more than a month.
Macarthur, which has advised its shareholders to take no action, said that the offer would have stopped it from talking to other suitors and considering a superior offer.
On 11 July Peabody and ArcelorMittal 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. (See: ArcelorMittal, Peabody Energy bid $5 billion for Australia's Macarthur Coal)
Four days later, Macarthur agreed to provide due diligence and site visits to Peabody and ArcelorMittal, after the suitors raised their offer to A$4.73 billion ($5.05 billion) and improve the indicative proposal to $18 per share if the companies gained 90 per cent of Macarthur and the payment of a special dividend of up to 98 cents per share. (See: ArcelorMittal, Peabody raise bid to see Macarthur's books)
Macarthur said that it ''rejected the extensive deal protection restrictions demanded by Peabody and ArcelorMittal because these restricted Macarthur's ability to facilitate access to other parties that may generate a superior alternate proposal.''