US energy firm Peabody yesterday cut its offer for Australian coal miner Macarthur, citing the government’s proposed tax on resources profits as one reason.
Peabody dropped its bid for Macarthur Coal Limited from A$4.07 billion (US$3.67 billion) to A$3.82 billion on the results of due diligence and the proposed 40 percent tax on the so-called “super profits” of mining firms.
“The definitive proposal delivers a clear, compelling and significant premium for Macarthur shareholders, and follows Peabody’s due diligence as well as the introduction of the Australian resources profit tax proposal,” it said.
Macarthur’s share price, along with that of other mining companies, has fallen steeply since the government announced the tax on May 2 — from A$15.28 in mid-April to A$13.69 on Friday.
Peabody’s first bid, which was rejected, was for A$13 per share. It later made two further offers of A$14 and A$16 a share to take over the company amid competing offers from Australian miner New Hope.
The revised offer is for A$15 per share.
Patersons Securities analyst Andrew Harrington said it was rare for a company to lower its highest offer in this way.
“I can’t think of any big company examples where someone has come in, increased their bid a couple of times, then made a new bid at a lower level,” Harrington told Australian news agency AAP.
Macarthur is the world’s top producer of a type of coal used to make steel, a building block for the mass industrialization projects under way in Asian countries such as China.
Shares in Macarthur fell A$0.31, or 2.26 percent, to close at A$13.38.
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