Australian miner Macarthur Coal
Macarthur Coal, led by CEO Nicole Hollows, has prompted frenzied bidding as coal majors eye its specialist pulverized or PCI coal, a cleaner input for steelmakers' blast furnaces.
The frantic maneuvering around Macarthur, the world's biggest exporter of PCI coal, follows a flurry of deals in Australia, where the number of big independent coal producers is dwindling as bigger players make acquisitions to meet booming Asian demand that has driven up coal prices.
New Hope, valued at almost $4.1 billion, offered 2.7 of its shares for every Macarthur share -- valuing its target at A$14.58 a share based on New Hope's last close.
That was a 4.1 percent premium to an earlier A$14 a share offer for Macarthur from St.Louis-based Peabody Energy
Kicking out New Hope's bid as inadequate, Macarthur recommended its shareholders vote for the deal with Gloucester, which would give around a 25 percent stake in Macarthur to Singapore-listed Noble.
Some analysts said New Hope may turn to regulators to try and delay the Macarthur shareholder vote on Monday -- a tactic already tried by Peabody.
Time is running out for the bidders, and one obvious route for New Hope would be to go to the Takeovers Panel to get an order to delay that meeting, said Paul McTaggart, resource analyst at Credit Suisse.
Both Peabody and New Hope made their approaches conditional on Macarthur not going ahead with the Gloucester/Noble deal.
Late on Friday, the takeover regulator rejected Peabody's appeal to stop Monday's vote.
In an unsourced report, the Australian Financial Review said London-listed Xstrata Plc
Macarthur said it had not received any offer from Xstrata, but analysts said the Swiss-based miner, which has major coal operations in Australia and is the world's biggest exporter of coal for power plants, could be trying to weigh up how much support it could get for a possible bid.
Xstrata could not be reached for comment.
The bidding war for Macarthur sent its shares up nearly 12 percent on Friday in heavy trading that was nearly eight times the daily average. The stock hit A$16.03, its best since August 2008, in a largely flat broader index <.AXJO>.
New Hope shares slipped 0.2 percent to A$5.30.
Macarthur's top three shareholders -- China's CITIC Resources Holdings <1205.HK> and steel giants ArcelorMittal
Steelmills would prefer Macarthur to not be swallowed by a major coal producer, said an analyst, who declined to be named as he does not cover ArcelorMittal or POSCO. But if they decide to get into bed with one, they'd make sure it doesn't have a big presence in coking coal.
Macquarie and Morgan Stanley have said in research notes this week that a buyer may need to offer closer to A$16 a share to win Macarthur minority shareholders' support.
New Hope, which ranks slightly above Macarthur in both market value and production capacity, said a merged entity would have an implied market value of over A$8 billion, and a diverse range of coal products, with five operational mines shipping through two coal terminals.
Brisbane-based New Hope produces about 5.5 million tons of coal a year, mostly for power generation. Macarthur produced 4.6 million tons of coal last year.
(Additional reporting by Narayanan Somasundaram in SYDNEY)
(Editing by Ian Geoghegan)
($1=1.077 Australian Dollar)