Brussels: ArcelorMittal, the world’s largest steelmaker, has unexpectedly pulled out of its joint $5 billion bid with Peabody Energy for Australian miner Macarthur Coal, just a day after the buyers said they had secured a majority of shares.
In a joint statement sent to Australian regulators by Peabody’s legal advisors, ArcelorMittal and Peabody said the steel giant had “elected to sell its interest” in their bid vehicle, PEAMCoal, instead of proceeding with a joint venture.
ArcelorMittal did not say why it was selling out and was not available for comment.
Lakshmi Mittal, president and chief executive officer of ArcelorMittal. Photo: Bloomberg
Peabody and ArcelorMittal bid A$16 per share for the coal miner offer and said on Monday they already had a relevant interest in about 59.85% of the shares.
China’s Citic, which owns a quarter of Macarthur, said on Friday it had accepted the offer despite speculation it had been holding out for a higher price or could launch a rival offer of its own.
The last remaining major shareholder in Macarthur yet to accept the offer is South Korean steel maker POSCO, which owns a 7.25% stake.
If POSCO accepts the offer, that could help push acceptances above 90%, which would lead to Peabody raising the offer to A$16.25 a share.
Peabody said in Tuesday’s statement that it would now own 100% in PEAMCoal and become owner of all the Macarthur shares that are tendered in the bid.
Shares in ArcelorMittal were 1.9% higher at €14.71 by 1123 GMT, when the STOXX Europe 600 Basic Resources sector index was up 0.8%.
Under the terms of its agreement with Peabody, ArcelorMittal must continue funding PEAMCoal for a further 90 days, the statement said.
ArcelorMittal and Peabody put in a bid for Macarthur in July, which the pair eventually took hostile in August after the Macarthur board said the bid undervalued the company.
A previous bid by Peabody to acquire Macarthur last year collapsed after Peabody cut its offer, blaming a new government mining tax.