More developments in the saga known as the takeover battle for Macarthur Coal.
Macarthur’s biggest shareholder, CITIC expressed reservations about the Peabody Energy bid, and in Hong Kong, shareholders in Noble Group voted down the deal to sell its 87% controlled Gloucester Coal to Macarthur.
That leaves the situation as confused as it has been.
Peabody may have been shut out of a successful bid for Macarthur Coal and may have to deal with both Noble Group, the first suitor, and with CITIC Resources, Macarthur’s biggest and longest standing shareholder.
After lifting its bid late last week to $16 a share, or $4.1 billion, and forcing Macarthur to postpone a shareholder meeting due yesterday and come to the negotiating table, the situation changed yesterday with a short statement to the market from Macarthur, which revealed CITIC’s attitude to the latest bid.
CITIC Resources said it has not yet decided whether to support Peabody’s $16 a share offer.
CITIC is part of the CITIC Group, a mainland-based trading group connected to the highest levels of the Chinese government.
It was started by a businessman who remained in China after the revolution and became the Vice President of China in 1993.
Noble Group is 15% owned by CIC, the Chinese government wealth fund. Both are obviously extremely important businesses to China.
If Peabody lifts its offer even higher, but can’t change CITIC’s mind, the US group will battle to retain an in with the Chinese steel industry.
CITIC’s stance, revealed yesterday, would seem to indicate there is opposition within Chinese business and political circles to Macarthur being absorbed by Peabody, which is the biggest coal miner in the US.
The statement read:
"Based on the current limited information available to CITIC about Peabody’s Further Proposal, CITIC is not in a position to make an informed assessment enabling it to make a decision on whether or not it could support Peabody’s Further Proposal.
"We also note that Macarthur Board has maintained its recommendation in relation to the Noble / Gloucester transactions.
"CITIC remains supportive of the rationale for the Noble / Gloucester transactions, which CITIC believes is in line with the vision to build Macarthur into a leading independent coal company.
"CITIC will continue to carefully monitor and analyze all developments and expressly reserves the right to vote its 22.4% shareholding in any manner that it determines at its absolute discretion."
The meeting that was due to be held yesterday was to vote on an asset swap and deal that would have seen Macarthur take over Gloucester Coal, 87% owned by Noble Group.
CITIC Resources, a founding shareholder of Macarthur with 22.4%, said it continues to support the rationale for Macarthur’s takeover of Gloucester and needed more information to evaluate Peabody’s offer.
Macarthur shares were steady at $16.54 yesterday, still 3% above the $16 a share offer price in a weaker broader market, a change from Friday when they traded sharply higher on the day as expectations of a bidding war emerged.
