Macarthur Coal has rejected the second bid from US group, Peabody Energy, saying the higher $14 a share price still undervalues the company.
Macarthur also said it would go ahead and seek shareholder approval at a meeting on next Monday, April 12 for its plan to take over smaller domestic rival Gloucester Coal and issue 24.6% of expanded capital to the Noble Group of Hong Kong.
News of the second rejection saw Macarthur shares fall 79c to $14.31 yesterday as investors figured the heat had gone out of the battle.
Macarthur chairman, Keith De Lacy, said: "Peabody’s revised proposal remains highly conditional and does not fully value Macarthur and its significant growth prospects.
"The Board has recommended the Gloucester takeover and Middlemount acquisition to shareholders and continue to believe these transactions are in the best interests of Macarthur and its shareholders."
"Peabody’s revised proposal remains highly conditional and does not fully value Macarthur and its significant growth prospects," Mr De Lacy said in a statement to the ASX yesterday.
The company said its board met yesterday morning to consider the $3.56 billion offer (up from the initial $13 a share offer) and unanimously determined that:
"The Revised Indicative Proposal does not represent an adequate premium for control of the company, being priced at: 1.5% discount to Macarthur’s average broker price target of A$14.21 per share and a 15.8% premium to Macarthur’s closing share price of A$12.09 per share on 30 March 2010."
"The highly conditional and uncertain nature of the Revised Indicative Proposal means that the Board of Macarthur can have no reasonable confidence of the proposal being ultimately put to shareholders as an offer.
"Accordingly, and in view of its fiduciary obligations to shareholders, the Board continues to recommend that shareholders vote in favour of the resolution at the Macarthur Shareholders’ Meeting scheduled for 12 April 2010 and has determined not to defer that meeting.
"The meeting is to approve the proposed issue of Macarthur Coal shares to Noble Group Limited ("Noble") under the takeover of 100% of Gloucester Coal Ltd, the acquisition of Noble’s interest in the Middlemount Coal joint venture and the acquisition of marketing rights for Middlemount coal.
"The Board notes that Peabody has advised in writing that "if Macarthur proceeds with its shareholders’ meeting on 12 April 2010 and the resolution is approved, it will mean [Macarthur’s takeover offer for Gloucester and the associated transactions with Noble Group] are likely to proceed, in which case Peabody’s proposal will lapse"."
Peabody had given Macarthur until 7 pm yesterday to call off that meeting.
