The battle for control of Macarthur Coal looks like it’s coming to a vital point.
Peabody Energy’s move to push its offer price up to $16 a share seems to have broken the impasse with Macarthur Coal saying Friday morning that Pohang Iron and Steel (Posco) had confirmed its in-principle support for the revised Peabody offer.
And Macarthur says ArcelorMittal, another big shareholder, says the Peabody offer warrants consideration.
A response from Chinese group, CITIC hasn’t been received yet, according to Macarthur.
These comments through into doubt Macarthur pushing ahead with Monday’s shareholder meeting to consider and vote on the deal with Noble Group of Hong Kong.
That could be enough to kill the deal with Noble in its present shape, or forever.
The Macarthur board is meeting today to further consider the situation.
The latest Peabody offer values Macarthur at $4.1 billion.
It’s up from the previous offers of $14 a share, and the first bid of $13 a share.
The US-owned Peabody said its latest proposal is "clearly superior" to Macarthur’s proposed takeover offer for Gloucester Coal and associated transactions with that company’s major shareholder Noble and other proposals that Macarthur has disclosed, which include the shares and cash offer from new Hope Corporation.
It came a day after New Hope Corp sweetened its scrip and cash bid for Macarthur to include a cash alternative to its scrip offer of a maximum $950 million.
Under that bid, Macarthur shareholders can elect to receive either 2.7 New Hope shares for each Macarthur share held or $14.50 cash for every share held in the target.
The $14.50 per share cash alternative values Macarthur at $3.68 billion compared with $3.53 billion for the all scrip offer from New Hope.
Peabody’s first two offers were rejected by Macarthur as inadequate,
This one has got everyone’s attention.
Peabody said it remained willing to provide Macarthur’s three major shareholders – Posco, Citic and ArcelorMittal – with the opportunity to retain their economic interest in Macarthur.
‘‘Peabody believes this optionality enhances the likelihood of securing shareholder approval under a customary scheme of arrangement,’’ it said.
"Peabody’s proposal is subject only to a limited, confirmatory due diligence period of up to five days, primarily focused on the terms of material contracts, including potential change in control provisions.
"With cooperation from Macarthur’s management team, Peabody’s proposal can be offered to Macarthur’s shareholders for consideration in a very short time period.
"Peabody’s proposal will lapse if Macarthur proceeds with the shareholder vote scheduled for April 19, 2010, or if the Gloucester/Noble Group transactions proceed."
