London/New Delhi: ArcelorMittal and Peabody Energy on Monday jointly launched a hostile bid for Australian firm Macarthur Coal, after the target company refused to accept their AUD 4.7 billion ($5.3 billion) takeover bid.
The Peabody-ArcelorMittal combine has offered a bid of AUD 15.50 per share plus a dividend of 16 cents per share, following the rejection of their conditional offer for an increase to AUD 16 per share by the Australian miner’s Board.
In a filing to the Australian Stock Exchange, Macarthur advised its shareholders not to take any action and termed the offer as “opportunistic”.
The company further said that it is in talks with “number” of parties that may result in a superior offer.
“The BidCo (Peabody-ArcelorMittal combine) offer appears to be an opportunistic attempt to acquire Macarthur at a time of global economic volatility and regulatory uncertainty in Australia, and fails to reflect Macarthur’s industry leading position and the growth potential of its unique assets,” Macarthur chairman Keith DeLacy said.
However, the Peabody-ArcelorMittal combine maintained that it is a “compelling offer” to the Macarthur shareholders and is offered at a 41% premium to the closing price of AUD 11.08 per share on 11 July, when the bid was made public.
“We are making an attractive offer directly to shareholders, which represents a 41% premium to the closing price immediately before our approach was disclosed to the market,” ArcelorMittal’s CFO Aditya Mittal said in a joint statement.
Peabody’s chairman and CEO, Gregory H Boyce said, “Peabody and ArcelorMittal believe our bid is compelling and we have decided to take this attractive offer directly to Macarthur shareholders to provide them with significant value.”
ArcelorMittal, with a 16% shares of Macarthur, is already the second largest shareholder of the company, while Chinese investment fund, CITIC is the largest shareholder, having a 24.3% stake in the company. Another steel giant, Posco owns 7% in Macarthur.
The joint statement of Peabody-ArcelorMittal added that the bidder’s statement would be lodged shortly and will be sent to shareholders about two weeks later.
Earlier, the Peabody-ArcelorMittal combine had agreed to increase their initial offer of AUD 15.50 per share made on 11 July during the due-diligence process, subject to the condition of Macarthur not to be talking to other potential bidders.
However, the Queensland-based Macarthur rejected the bid, so that it can keep the channel open for other potential suitors.