Proposed Australian tax leads to Macarthur's rejection of Peabody's lowered bid

The Australian government's proposed resource tax has claimed its first scalp as Macarthur Coal rejected Peabody's revised lower bid after the US-based coal miner factored in the 40-per cent proposed tax into its latest offer.

After conducting due diligence this month, Peabody Energy, the world's biggest independent coal miner had lowered its earlier offer of A$16 per Macarthur share to A$15 a share after factoring in the Australian government proposed 40-per cent resource super profits tax.

The Queensland-based Macarthur Coal's rejected the bid as China's CITIC Resources Holdings, the largest shareholder in the company with a-22.4 per cent stake, said that Peabody's offer was too low.

Macarthur said in a statement, that CITIC did not find the lowered proposal attractive. "CITIC believes that the long-term strategic value of Macarthur Coal exceeds by a significant margin the cash offer price contained in Peabody's further proposal.''

''Furthermore, the terms of the shareholders agreement to govern the privatised Macarthur Coal will be critical in any assessment by CITIC. The proposed terms of a shareholders agreement tabled by Peabody in March 2010 are not acceptable to CITIC.''

''The Macarthur board considers that there is no basis for further engagement with Peabody on terms of its current proposal.''