Macarthur Coal has deferred the contentious shareholder meeting due for today by a week and rejected a $3.71 billion takeover bid by New Hope Corporation Ltd.
Macarthur’s board at first urged shareholders to vote in favour of its planned takeover of Gloucester Coal and an associated transaction with the target’s largest shareholder Noble Group at a shareholders’ meeting scheduled for April 12.
That was in their rejection of the New Hope bid.
But later in the day the company announced that the meeting had been deferred until next Monday, which is when Noble Group shareholders are to vote on their side of the deal in Hong Kong.
In anticipation of a higher bid (perhaps from Xstrata, which is sniffing around), Macarthur shares peaked at $16.03 and closed at $15.55, a gain of $1.19, or 8.3%, on the day.
Macquarie Group has been talking to some Macarthur shareholders on behalf of Xstrata, business media reports said today.
Over the week they are up more than 30% from the $12.09 before the skinny $13 a share first bid was lobbed in by Peabody.
The shares are a long way short of the $20 that steel giants, Posco and Arcelor Mittal paid back in mid 2008.
But the New Hope bid has pushed the price out of reach of Peabody, unless it wants to go to $16 or more to try and regain the advantage.
Amid this rush of activity, Macarthur postponed today’s meeting saying shareholders needed more time to consider the recent flood of information.
The crucial meeting is most likely to be determined by Macarthur’s three biggest shareholders – steel makers ArcelorMittal and Posco, and Chinese investment group CITIC. Between them they control 46% of the votes and Peabody has approached them with its interest.
The two moves came on another busy day of statements, claims and decisions on Friday that left the market none the wiser to the fate of the company.
The offer of 2.7 of New Hope shares for every Macarthur share held was launched, topping the second of two bids (worth $3.5 billion) from US-based Peabody Energy.
The fresh offer came amid media reports that Xstrata was looking to involve itself.
The New Hope offer was quickly dismissed by the board on Friday:
"The board of Macarthur met this morning and unanimously determined not to recommend the New Hope proposal to shareholders, as the board has formed the view that the scrip ratio of 2.7 New Hope shares for every Macarthur share does not represent an adequate premium for control of the company," Macarthur said in a statement.
"The proposal consists of a scrip offer with no cash alternative and requires the approval of 75 per cent of votes cast at a scheme meeting.”
The New Hope offer was binding, unlike Peabody’s, but both offers were conditional on Macarthur not proceeding with the Gloucester deal (with Noble which controls Gloucester) which has been backed by Gloucester’s board.
Several media on Friday and Saturday claimed Xstrata Coal plans to make an offer for Macarthur.
A figure of $4 billion was mentioned in those reports this morning.
Macarthur said on Friday it had ”not received any approach from Xstrata".
Separately, Noble said in a statement that the Gloucester-Macarthur merger proposal was designed for those that want to ride along with coal".
"Our proposal only works for people with a longer-term bullish view on where coal is going.”
Noble has offered $12.60 per share to mop up the remaining shares in Gloucester that it does not already own, in the event Macarthur does not takeover Gloucester.
