Coal miner, Peabody Energy Corp. (BTU) slashed its previous bid for acquiring Macarthur Coal Limited, due to the new Australian proposal to tax mining profits. The company has slashed its offer to A$3.8 billion (US$3.4 billion) from A$4.1 billion (US$3.8 billion) proposed earlier.
On Apr 15, Peabody had agreed to pay Macarthur shareholders A$16 per share (now revised to A$15 per share), after Macarthur had rejected two earlier Peabody offers. Peabody had initially offered A$13 per Macarthur share, which was increased to A$14 and later to A$16.
Peabody stated that the definitive proposal delivers a clear, compelling and significant premium for Macarthur shareholders, and follows Peabody’s due diligence as well as the introduction of the Australian mining profit tax proposal. The company indicated that the proposal still offered a 31% premium on Macarthur’s average share price over the month of March and a 42% premium over Macarthur’s average share price over the months of February and March.
Macarthur said that its Board of Directors will meet to consider the offer. It did not say when that meeting would take place.
St. Louis, Missouri based Peabody Energy is the world’s largest private sector coal mining company, owning majority interests in more than 30 mines in the U.S. and Australia. Peabody conducts its business through four principal operating segments: Western U.S. Mining, Midwestern U.S. Mining, Australian Mining and Trading & Brokerage. Peabody has a proved and probable reserve of 9.2 billion tons of coal. In 2009, Peabody sold 224 million tons of coal for total revenues of $6.0 billion.
Last month, Peabody reported first quarter 2010 earnings of 52 cents per share, higher than the year-ago profit of 50 cents. Peabody’s quarterly sales, at $1.5 billion, increased 4.3% year over year.
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