Macarthur Coal has rejected Peabody Energy Corporation’s (BTU) raised bid worth A$3.56 billion (US$3.3 billion).
In an effort to abandon Macarthur’s proposal to acquire Gloucester Coal Limited, in deal that would make Singapore-based Noble Group the largest shareholder in Macarthur, Peabody had raised its bid to $3.3 billion.
Under Peabody’s revised non-binding proposal, Macarthur shareholders would receive a cash price of A$14.00 per share. This represents a 44% premium to A$9.70 per share, the price at which Macarthur agreed to issue shares to Noble Group in relation to the Gloucester takeover offer.
Furthermore, the company had also reduced its conditionality of the proposal. While Peabody continues to offer Macarthur’s three largest shareholders the ability to retain their original interest in Macarthur, its new offer is not contingent on their commitment provided the Macarthur board of directors supports the latest proposal.
Peabody believes the takeover offer for Gloucester and the associated transactions with Noble Group are not in the best interests of Macarthur shareholders. Furthermore, Peabody had requested the Macarthur board to delay its shareholders’ meeting planned for April 12, 2010, when Macarthur shareholders are scheduled to vote on the Gloucester deal.
However, Macarthur’s board believes Peabody’s revised proposal still remains highly conditional and does not fully value Macarthur and its significant growth prospects. Additionally, Macarthur said it will continue with its April 12th shareholders meeting to get approval for the take over its rival Gloucester.
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