Peabody, ArcelorMittal Get Hostile Over Macarthur Takekover
Peabody (NYSE:BTU) and ArcelorMittal (NYSE:MT) launched a hostile takeover for Macarthur Coal on Monday valued at $4.7 billion Australian dollars ($5.14 billion) after the company refused to halt discussions with rival bidders in exchange for a higher price.
Macarthur had called Peabodys raised bid opportunistic and told shareholders to take no action earlier on Monday, claiming it had rejected higher proposals from the two. The company said it would continue talking to a number of rival bidders but would be willing to accept revised bid terms.
Under the hostile bid, Macarthur shareholders would receive about 15.50 Australian dollars a share, or $16.94, a premium of 41% to its closing price on July 11, the day the deal was initially made public. ArcelorMittal already holds a 16% share in Macarthur.
Following due diligence, Peabody and ArcelorMittal said they attempted to negotiate with Macarthur but the Australian company was not willing to engage in the conversations even with the buyers willingness to improve the price.
Peabody and ArcelorMittal believe our bid is compelling, said Peabody CEO Gregory Boyce, And we have decided to take this attractive offer directly to Macarthur shareholders to provide them with significant value.
The takeover battle for Macarthur, which is the worlds largest miner by output of pulverized coking coal, underscores the importance of the Australian resource race, as mining and steel companies continue to secure areas critical to China and other developing markets.