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Peabody Energy And ArcelorMittal Submit All Cash Offer To Acquire Macarthur Coal

The total value to be received by Macarthur shareholders of up to A$15.66 per share represents a substantial premium of:

  • 41% to A$11.08 per share, the closing price on July 11, the day Peabody and ArcelorMittal's approach was disclosed to the market;
  • 44% to A$10.85 per share, the 15-day VWAP to July 11;
  • 45% to A$10.82 per share, the one-month VWAP to July 11;
  • 38% to A$11.32 per share, the three-month VWAP to July 11; and
  • 36% to A$11.50 per share, the price at which Macarthur raised equity in August 2010.

Peabody and ArcelorMittal urge Macarthur shareholders to accept the offer to receive a substantial premium for their investment.

  • This is an offer that is superior to Macarthur's relevant trading ranges, not only in its recent trading history, but over an extended time frame.
  • The bid fully recognises Macarthur's existing operations and growth prospects.
  • The deal protection measures to which Macarthur refers are, in fact, quite customary.  

Should the offer be successful, Macarthur will form an integral part of Peabody Australia and expand ArcelorMittal's mining interests in the key resource market of Australia.   Both Peabody and ArcelorMittal acknowledge and value the contribution that Macarthur employees will make to the ongoing operations and growth plans.  

The offer is made by a newly formed company, PEAMCoal Pty Ltd (ACN 152 004 772), to be owned 60% by Peabody and 40% by ArcelorMittal.  PEAMCoal has a relevant interest of 16.1% in Macarthur's shares.  Committed financing for the transaction has been secured.

The offer is subject to a limited number of conditions including minimum 50.01% acceptances, approval by Australia's Foreign Investment Review Board, other regulatory approvals and other standard conditions.

Peabody and ArcelorMittal expect to lodge the Bidder's Statement in relation to the offer with the Australian Securities and Investments Commission ("ASIC") shortly. The Bidder's Statement will set out in detail why Macarthur shareholders should accept the offer and will be dispatched to Macarthur shareholders approximately two weeks after its lodgement with ASIC.  In the interim, any Macarthur shareholder seeking further information regarding the offer should contact PEAMCoal's Offer Information Line on 1800 992 039 (for callers within Australia) or +61 2 8280 7692 (for callers outside Australia).

UBS is serving as lead financial adviser to Peabody.  Bank of America Merrill Lynch and Morgan Stanley are also providing financial advisory services, and Freehills is serving as legal adviser.  ArcelorMittal has engaged RBC Capital Markets as its financial adviser and Mallesons Stephen Jaques as its legal adviser for the proposed transaction.

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