This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

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

Regulatory News:

Peabody Energy (NYSE: BTU) and ArcelorMittal (NYSE: MT) today confirm that following the recent completion of due diligence they intend to launch an all-cash off-market takeover bid to acquire all the shares in Macarthur Coal Ltd (ASX: MCC).

Under the offer, Macarthur shareholders will be offered A$15.50 cash per share, valuing the equity in Macarthur at approximately A$4.7 billion.

Macarthur shareholders will also be entitled to retain any final dividend declared by Macarthur in respect of the financial year ended June 30, 2011, up to an amount of 16 cents per share, without reducing the offer price. This represents a total value of A$15.66 cash per share.

Following due diligence, Peabody and ArcelorMittal attempted to negotiate a bid implementation agreement (BIA) with Macarthur. However, Macarthur was not willing to engage on a BIA on customary terms even with Peabody and ArcelorMittal’s willingness to improve the price from the original proposal if such a BIA could be agreed. As a result, a formal offer was submitted to Macarthur, valuing the company at $15.66 per share (inclusive of the dividend) without a BIA while seeking a recommendation. The Macarthur board declined to recommend this offer.

“Peabody and ArcelorMittal believe our bid is compelling,” said Peabody Energy Chairman and Chief Executive Officer Gregory H. Boyce, “And we have decided to take this attractive offer directly to Macarthur shareholders to provide them with significant value.”

Aditya Mittal, CFO and Member of the Group Management Board of ArcelorMittal said, “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.”

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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs