Peabody lowers Macarthur bid

PEABODY Energy has knocked $A1 off its $16 cash bid for Macarthur Coal shares, as the Rudd government’s unexpected resources tax lowers Australian mining stock valuations.

Image courtesy of Macarthur Coal

10 May 2010
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Blair Price

Otherwise, the new $15 proposal from Peabody is similar to its previous bid, which is a play for a controlling interest in Macarthur as opposed to a full takeover.

This arrangement allows Macarthur’s substantial shareholders to keep their stakes.

Peabody said its new bid is subject to a scheme of implementation agreement, unanimous recommendation of Macarthur’s board and Macarthur shareholder approval.

Macarthur’s board is recommending its shareholders take no action.

On Friday, Macarthur shares closed at $13.69, 11.5% down from the week previous and 15% lower than the $16.15 they fetched the previous fortnight.

CITIC Resources, ArcelorMittal and POSCO collectively own 47.4% of Macarthur.