Macarthur announced just before Christmas it intended to acquire 100% of Gloucester Coal in an off-market takeover with an all-scrip offer and cash alternative.
The deal is worth $A175 million cash and 22.5 million Macarthur shares issued at $9.70 per share.
Macarthur announced today it had agreed with Donaldson Coal owner Noble Group that it would not go ahead with acquiring a majority stake in Donaldson as part of the deal.
“We have agreed with Noble not to proceed with the elements of the transaction which relate to Donaldson,” Macarthur managing director Nicole Hollows said.
“However, we believe that the acquisition of Gloucester and Noble’s interest in Middlemount will create significant value for Macarthur shareholders by creating a more diverse business with exposure to multiple product types, geographies and mining operations.”
Macarthur has now entered a definitive legal documentation with Noble over its December 22 agreement with a few changes.
Future royalties payable by Middlemount to Noble have been reduced by half a per cent to 1%.
Macarthur has also agreed to grant Noble the option of applying the amounts owed for the royalty reduction, the cancellation of Noble’s 20% option over Middlemount and certain loans owed by Middlemount to Noble towards the subscription for Macarthur shares at $9.70 each.
Macarthur also intends to enter into a performance-based agreement with Noble by February 12 over Noble’s provision of day-to-day logistics management of the New South Wales rail and port supply chain.
Macarthur expects the agreement to be for an initial term of three years.
The Middlemount transaction is still subject to Foreign Investment Review Board approval, the Gloucester offer becoming unconditional and Noble accepting the offer.
Macarthur will issue a bidder’s statement by early March and will hold a shareholders’ meeting mid-April. The Gloucester offer is expected to close early May.
In a separate deal, Macarthur still intends to acquire Citic Resources Holdings’ direct interests in Macarthur’s operating assets and to terminate Citic’s marketing rights to China and India.
Macarthur was trading down 3.37% mid-morning today at $9.88.