Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Peabody cuts Macarthur Coal bid to $3.4 billion

Send a link to a friend

[May 10, 2010]  MELBOURNE, Australia (AP) -- U.S. coal giant Peabody Energy Corp. reduced its offer for miner Macarthur Coal Ltd. to 3.8 billion Australian dollars ($3.4 billion) due in part to a proposed new Australian tax on mining profits, the companies said Monday.

Peabody, one of the world's largest coal suppliers, had last month offered $3.8 billion after Macarthur, a major producer of pulverized coal used by steelmakers, had rebuffed two earlier Peabody offers as inadequate.

The U.S. company, based in St. Louis, Missouri, said in a statement its revised offer from AU$16 a share to AU$15 still offered a 31 percent premium on McArthur's average share price over the month of March

"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 resources profit tax proposal," Peabody said.

Exterminator

The government angered the mining industry last month by announcing a new 40 percent tax on the booming profits of resource companies from 2012.

The government expects to raise an additional AU$9 billion a year through the tax while opponents warn it would deter investment in the mining industry.

Macarthur said in a statement that its board of directors will meet to consider the offer. It did not say when that meeting would take place.

Since Peabody made its AU$16 a share offer on April 15, Macarthur's share price has fallen from AU$15.28 to Friday's closing price of AU$13.69.

[to top of second column]

Internet

That drop reflected the government tax plans plus a broader market downturn in response to the Greek debt crisis.

Peabody made an original bid at AU$13 per Macarthur share, which was increased to AU$14 and later to AU$16.

Andrew Harrington, analyst with Australian stockbroking firm Patersons Securities, said it was highly unusual for a bidder to reduce its highest offer.

Shareholders and analysts would now be curious about what Peabody found in its due diligence that caused it to lower its takeover bid, he said.

Peabody last month announced its first-quarter profit through March fell 21 percent to $133.7 million, reflecting lower coal prices and higher provisions for taxes.

[Associated Press]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Investments

< Recent articles

Back to top


 

News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor