Anglo American Said to Weigh Counterbid to Peabody s Macarthur Coal Offer

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Anglo American Plc (AAL) is exploring a bid for Macarthur Coal Ltd. (MCC) that would challenge Peabody Energy Corp. (BTU) s A$4. 7 billion ($4. 9 billion) offer for the Australian miner, said two people with knowledge of the matter.

Anglo American, part owner of the world s biggest platinum and diamond producers, is studying Macarthur s finances, said one of the people, who declined to be identified as the talks are private.

Buying Brisbane-based Macarthur would give Anglo steelmaking-coal mines in Australia as prices trade near a record. Peabody and its bidding partner, ArcelorMittal, took their offer directly to Macarthur shareholders after talks with the board collapsed.

Acquisition of metallurgical coal fits with Anglo s strategy, Peter Davey, London-based head of metals and mining research at Standard Bank Group Ltd. , said by telephone. They have the firepower because they were a bit stingy on dividends. Maybe they kept the money for this instance potentially.

Anglo American doesn t comment on speculation, said Emily Blyth, a London-based spokeswoman. She also said the company does examine growth opportunities in our core commodity groups across geographies.

Macarthur rose 48 cents, or 3. 1 percent, to $16. 15 in U. S. over-the-counter trading as of 5:20 p. m. New York time. Its Australian stock fell 18 cents to A$15. 32 in Sydney earlier today.

Offer Snubbed

Peabody, based in St. Louis, and ArcelorMittal (MT) are bidding A$15. 50 a share. Macarthur directors had snubbed that offer earlier, demanding A$18.

ArcelorMittal, based in Luxembourg, is Macarthur s second- biggest shareholder, with about 16 percent. Brokers including RBS Morgans Ltd. have said a rival bid may include Macarthur s largest investor, Citic Group. Citic is receiving advice from Macquarie Group Ltd. , said one person familiar with the matter.

If successful, the Peabody group s bid for Macarthur would be the second-largest coal takeover this year, second only to Alpha Natural Resources Inc. (ANR) s $7. 1 billion purchase of Massey Energy Co. in June. This year has yielded almost 50 coal transactions globally, with a combined value of more than $20 billion.

We will see more of these kind of deals because large-cap companies like BHP Billiton, Anglo have a lot of cash, Davey said. The recent shake-out in the market is bringing a lot of opportunities for housekeeping in terms of buying out minorities.

Anglo American announced an interim dividend of 28 cents a share on July 29. That compares with interim dividends of 25 cents last year and 44 cents in 2008. It didn t offer any dividend in 2009 during the global financial crisis.

Courtesy: Bloom Berg

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