Australian coal miner Macarthur Coal Ltd. (MCC.AU) said Monday it received a takeover offer from Peabody Energy Corp. (BTU) and ArcelorMittal (MT) that values the target at 4.68 billion Australian dollars (US$5.01 billion).

Macarthur, the world's largest producer of the pulverised coal used in some blast furnaces, said the companies had offered A$15.50 a share for the business through a jointly owned bid company, less the amount of the company's final dividend this year.

The bid was lodged after the company's shares closed 2.8% lower at A$11.08. Australia introduced plans to price carbon emissions Sunday, in a move that some local media reports predicted would diminish investment in the local resources sector.

"The board makes no recommendation in relation to the indicative proposal but will seek to engage with Peabody and ArcelorMittal in relation to the price and terms," Macarthur said in a statement. It advised shareholders to take no action.

Andrew Pedler, an analyst at Wilson HTM Securities in Brisbane, said there was little to recommend the proposal to long-term shareholders given that previous, higher offers had been made for the company.

"It depends on the reason you've invested. Macarthur's been through tough times and they're now climbing out of it. A$11.00 to A$15.50 looks pretty good but if you're wanting to get long-term value out of the dividend stream I wouldn't be so interested," he said.

Peabody made four separate offers for Macarthur in the early months of last year, initially offering A$13 a share on March 30 before raising the offer to A$14 a week later and A$16 on April 15. On May 10, the company reduced its offer to A$15 a share, and was knocked back by Macarthur. "Based on the price and conditions of the proposal...it cannot reasonably be recommended to shareholders," the company said at the time.

In response to Peabody's previous offers, another major shareholder, POSCO (PKX), offered in-principle support, while Citic Resources Australia Pty Ltd., a division of state-owned Citic group, said it wasn't in a position to make a decision on how to vote its share.

Citic now has 15.76% of the company while Posco holds 7.02% of voting shares, according to ThomsonONE.

Although Australia is the world's largest coal exporter, Macarthur, which mines around 5.3 million tons of coal a year from two mines in Queensland's Bowen Basin coal-producing region, is one of the last few independent coal miners left on the local market.

The bulk of the local industry comprises divisions of major global groups such as BHP Billiton Ltd. (BHP), Rio Tinto PLC (RIO), Xstrata PLC (XTA.LN), Anglo American PLC (AAL.LN), and Peabody.

Macarthur's only locally listed peers that are actually producing coal are now New Hope Corp. (NHC.AU), Aquila Resources Ltd. (AQA.AU), Whitehaven Coal Ltd. (WHC.AU), Gloucester Coal Ltd. (GCL.AU) and Gujarat NRE Coking Coal Ltd. (GNM.AU)--all of which are regarded as being close to immune from non-negotiated takeovers due to the presence of controlling shareholders or groups of shareholders.

Macarthur had no further comment on the proposals, while spokespeople for Peabody and ArcelorMittal didn't immediately return calls for comment.

-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com

Great Northern Minerals (ASX:GNM)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more Great Northern Minerals Charts.
Great Northern Minerals (ASX:GNM)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more Great Northern Minerals Charts.