PERTH, April 14 (Reuters) – Australian coal miner New Hope Corp (NHC.AX) bolstered its $3.3 billion bid for Macarthur Coal (MCC.AX) with cash on Wednesday, saying it had discussed its revised offer with Macarthur’s leading shareholders.
Macarthur, the world’s top exporter of PCI coal, a cheaper, cleaner-burning coal coveted by steelmakers, is at the centre of a takeover tussle between New Hope and U.S. miner Peabody Energy (BTU.N). Both insist Macarthur calls off a plan to buy smaller rival Gloucester Coal Ltd GCL.AU as a condition of their bids.
Under New Hope’s revised offer, Macarthur shareholders can opt for 2.7 New Hope shares for every Macarthur share, or A$14.50 in cash — though the cash option is capped at a total payout of A$950 million.
“We’ve spoken with all Macarthur major shareholders and they are obviously pretty non-committal when you’re talking to them,” New Hope Chairman Robert Millner told Reuters.
“But they have all expressed their point of view, which has made us decide to revise our offer. This is now the best offer on the table.”
Throwing in a cash option may also have been prompted by a dip in New Hope’s share price, said one analyst at a major investment bank.
“The revised offer is clearly more attractive to institutional investors that could be looking to cash out from their positions,” said the analyst, who declined to be identified as he was not authorised to speak to the media.
“If one was to go by its (New Hope’s) original offer, the implied value would be lower than Peabody’s all-cash offer.”
New Hope shares have shed 3 percent since Friday to A$5.15, meaning the implied value of its original all-share offer has fallen to A$13.91 — versus Peabody’s A$14 a share cash offer, and some way below Macarthur’s share price of A$15.50.
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If the cap were reached, shareholders would receive the cash on a pro-rata basis and the rest in shares.
Macarthur’s three major shareholders — China’s CITIC Resources (1205.HK) and steel giants ArcelorMittal (ISPA.AS) and South Korea’s POSCO (005490.KS) — own a combined 47.3 percent.
XSTRATA COULD DISAPPOINT
Investors hoping coal giant Xstrata Plc (XTA.L) may enter the fray with a bid topping A$16 a share stand to be disappointed.
Macarthur shares surged to a 21-month high of A$17.17 on Monday, but have since lost nearly 10 percent as talk of Xstrata bidding has petered out.
Switzerland-based Xstrata has said it was focused on organic growth and would look at acquisitions only on an “opportunistic” basis.
Macarthur has previously rejected offers from New Hope and Peabody, preferring its initial plan to acquire Gloucester as part pf a deal that would give commodities firm Noble Group Ltd (NOBG.SI), a major shareholder in Gloucester, a one-quarter stake in Macarthur.
POSCO said on Tuesday it has no current plans to sell its 8.3 percent stake and wanted to keep Macarthur as a stable supplier, while CITIC Resources had yet to decide how to vote at an extraordinary meeting on Monday to approve the Gloucester deal. [ID:nSGE63C025] (Editing by Ian Geoghegan) ($1=1.076 Australian Dollar)