Macarthur Coal’s days as a listed Australian coal company look numbered after the board bowed to the inevitable and decided to talk to Peabody Energy of the US about the latter’s conditional $16 a share offer.
To do so, Macarthur was forced to postpone today’s special shareholder meeting which was to have discussed and voted on the deal with Noble Group of Hong Kong, which triggered the takeover battle last December.
Macarthur shares jumped 8.3% Friday to $16.54, above the $16 a share bid from Peabody, but more a level based on hope.
There’s still market hopes for Xstrata to enter the fray with a higher offer, or New Hope Corp to return with a richer offer than its shares and cash second offering from last week.
Macarthur said Friday that it will begin talks with Peabody after its second-and third-largest shareholders, ArcelorMittal and Posco, gave conditional backing for the Peabody proposal.
In postponing today’s shareholder meeting, Macarthur has probably terminated the transaction with Noble Group.
The coal giant lifted its takeover offer for Macarthur on Thursday to $16 per share, throwing into doubt the shareholder meeting, which would have voted on a rival, earlier proposal.
"The board of Macarthur Coal Ltd has considered Peabody’s further proposal and intends to enter discussions with Peabody," Macarthur said in a statement to the stock exchange on Friday.
"Given this development, the extraordinary general meeting scheduled for Monday 19 April 2010, will be postponed to a date, time and venue to be advised."
The board told shareholders it has not made a recommendation in relation to Peabody’s latest bid and continues to advise shareholders to take no action on this bid.
Under the earlier proposal, previously backed by Macarthur’s board, Macarthur was to take over Gloucester Coal in a deal that would deliver Singapore’s Noble Group a 24.6% stake in Macarthur.
Such a stake would give Noble a blocking stake if there were further bids for Macarthur, which also is a takeover target of New Hope Corporation.
Peabody said in a statement on its website:
"We are pleased that Macarthur Coal has decided to engage with us and also has postponed its EGM to allow us time to reach a satisfactory conclusion for all shareholders.
"We’re also pleased at the positive statements made today by two of Macarthur’s major shareholders – ArcelorMittal and Posco – regarding our proposal.
"We continue to believe that a combination of the two companies would offer a strong complementary fit, creating a substantial Australian operating platform with excellent capabilities and resources.
"Both companies have an organic growth pipeline that is set to double metallurgical coal volumes within the next five years to serve high-growth Asian markets."
So far, no reaction from Noble on its website, where it has been posting statements.
