Macarthur tries to keep rival bid alive

 @ibtimes
on April 28 2010 8:08 AM

Australian takeover target Macarthur Coal left the door open on Wednesday to pursue a new bid for smaller rival Gloucester Coal , while awaiting a formal offer from its U.S. suitor.

But there was no sign that Gloucester or its controlling shareholder, Noble Group , wanted to talk to Macarthur.

Macarthur extended the deadline on its A$1.1 billion ($1.0 billion) offer for Gloucester by a week to May 13, even though the deal was all but dead after commodities firm Noble walked away from the deal last week.

It's basically to give us a bit more flexibility to discuss with Noble and Gloucester how we might reconfigure the transaction...and see if there's any possibility of resurrecting it in some form, said Alasdair Jeffrey, a spokesman for Macarthur. The move comes as U.S. coal miner Peabody Energy is reviewing Macarthur's books before deciding whether to formalize its $3.7 billion bid for the Australian miner, coveted for its pulverized coal, a cheaper, cleaner coal that steel makers want.

Peabody has until May 3 to complete its review.

For Peabody to go ahead with the type of bid it planned -- called a scheme of arrangement -- it needs the support of Macarthur's board and its biggest shareholder, CITIC Resources <1205.HK>, which has said it liked the Gloucester deal.

Noble's spokesman said the firm was not planning any new deal with Macarthur.

To my knowledge Noble has turned their attention to other matters, its external spokesman, Martin Debelle, said, declining to comment on what the Hong Kong-based group was working on.

Gloucester declined to comment.

Noble had said if the Gloucester deal was defeated, it would offer A$12.60 a share to mop up the 12.3 percent of Gloucester it did not already own, but it cannot go ahead with that plan until Macarthur's bid for Gloucester lapses.

Macarthur has already rejected two previous offers from Peabody and two offers from local energy and mining group New Hope Corp , saying it preferred its plan to take over Gloucester to create Australia's biggest independent coal miner.

For Macarthur, the prize in the Gloucester deal was it was going to acquire Noble's 25 percent stake in the Middlemount coal mine, and Noble was going to give up its right to marketing 100 percent of the mine's production and its right to a royalty.

Peabody was not immediately available for comment.

Macarthur shares closed down 0.9 percent at A$15.90 on Wednesday, just below Peabody's proposed offer, indicating investors do not expect a higher bid to emerge.

Gloucester closed down 0.6 percent at A$12.10, 4 percent below the mop-up bid planned by Noble and 10 percent below the implied value of Macarthur's offer, indicating investors considered the deal with Macarthur dead.

(Editing by Narayanan Somasundaram)

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