Peabody Energy Corp, the biggest US coal company, offered A$3.3 billion (US$3 billion) in cash for Australia’s Macarthur Coal Ltd to benefit from rising demand in China, where imports tripled last year.
The unsolicited A$13-a-share bid sent shares in Brisbane-based Macarthur surging to A$14.05, as investors bet Peabody will have to increase its offer to win over ArcelorMittal and Posco, who paid as much as A$20 a share for their stakes. The proposal is “highly conditional” and not in the best interest of shareholders, Macarthur said yesterday in a statement.
GETTING BIGGER
“Peabody is probably looking to get bigger in a market that’s growing, especially when compared with the US,” said Andrew Harrington, an analyst at Patersons Securities Ltd in Sydney. “A bidding war for Macarthur is possible.”
The offer may thwart Noble Group Ltd’s attempt to become Macarthur’s biggest shareholder in a stock swap for the Hong Kong-based commodity supplier’s Gloucester Coal Ltd. Peabody operates eight mines in Australia’s Queensland and New South Wales states, and is seeking more to feed power stations and steel mills in China, the world’s largest user of coal.
ArcelorMittal, the world’s biggest steelmaker, holds 16.6 percent of Macarthur and South Korea’s Posco owns 8.3 percent, Bloomberg data showed.
Citic Australia Coal Ltd has 22.4 percent. Peabody is in talks with the three companies and is offering them the opportunity to retain their interest in Macarthur, it said in a statement.
The deal values Macarthur, the world’s biggest exporter of pulverized coal used by steelmakers, at 17 times earnings before interest and tax, which is more than double the EBIT multiple that Yanzhou Coal Mining Co (兗州煤業) paid for Felix Resources Ltd in a A$3.5 billion takeover seven months ago.
HITCH
Peabody’s offer is conditional on Macarthur’s takeover of Gloucester not proceeding, Macarthur said. Gloucester has recommended shareholders accept Macarthur’s A$8 a share offer.
“There is a strong strategic rationale for a combination of Macarthur’s operating assets and project pipeline with Peabody’s growing Australian platform of metallurgical and thermal coal production,” Peabody said, saying it is “disappointed” with Macarthur’s reaction to its bid.
DOUBLING OUTPUT
Macarthur chief executive officer Nicole Hollows, aiming to complete the Gloucester takeover by July, is seeking to double output in the next five years.
The company has two operations in Queensland’s Bowen Basin. Four of Peabody Australia’s mines are located in the same region, its Web site said.
“Peabody’s proposal is highly conditional and does not fully value Macarthur and its significant growth prospects,” Macarthur chairman Keith De Lacy said in a statement.
The company also said the offer did not acknowledge that “the outlook for coal markets has improved significantly over the past quarter.”
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS