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Noble Tells Peabody Energy to Back Off

Asia's largest diversified commodities trading company, Noble Group, is telling Peabody Energy to back away from Peabody's A$3.3 billion pursuit of Australia's Macarthur Coal.
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NEW YORK (TheStreet) -- Asia's largest diversified commodities trading company Noble Group is telling Peabody Energy (BTU) - Get Peabody Energy Corporation Report to back away from Peabody's A$3.3 billion pursuit of Australia's Macarthur Coal.

An aerial view shows coal being transported by train from Peabody Energy's North Antelope Rochelle Mine in the Powder River Basin, in Wyoming.

Noble controls Australia-based

Gloucester Coal

, which has agreed to be acquired by Macarthur for a planned figure of about A$832 million. Peabody's bid hinged on Macarthur's withdrawal of the proposed offer, but the Macarthur spurned its eager suitor.

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"The board of Macarthur reacted to their bid with the same enthusiasm as a lost and hungry hiker who stumbles across a road kill Roo that had been in the sun too long, and not surprisingly said 'no thanks,'" Noble wrote in a statement posted Monday on the Singapore stock exchange.

"Life was great until a few days ago when, instead of jumping on their horses, the Americans charged into town on a Gulfstream jet for the afternoon and plunked a bid down that was a great deal for them, and not, in our view, anywhere near what was already on the table. Hats off to them for being opportunistic and crafty; it ruined our Easter weekend."

Noble said that the deal between Gloucester Coal and Macarthur had already been carefully considered over a substantial period of time by the boards of both companies and had been unanimously supported and recommended to Macarthur's shareholders at a vote to take place on April 12, 2010.

Noble now is threatening to sabotage Peabody's takeover attempt or "chase these chaps out of town" by exercising Noble's option to increase its share of the Middlemount mine to 50%, where Noble would have the right to sell 100% of the output for the life of the mine, among other things.

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"It goes without saying the Middlemount mine would then have to be operated as a separate 50-50 joint-venture company," Noble said. Part of the Middlemount transaction breakdown includes Macarthur's payment for the acquisition of the remaining 25.34% interest in Middlemount not currently owned by Macarthur.

Peabody stock has edged lower to $45.80, down 0.1%.

-- Reported by Andrea Tse in New York


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