Peabody Energy, the largest U.S. coal producer, and ArcelorMittal, the world's largest steelmaker, have taken their $5.2 billion takeover bid for Australia's Macarthur Coal hostile after talks with Macarthur management. This is Peabody's second attempt at acquiring the Australian. The U.S. company offered $3.4 billion for its Australian rival last year in a solo bid, but was rejected.
Missouri-based Peabody (BTU) and ArcelorMittal (MT) have formed a joint venture of which Peabody would own 60% and the steel giant the remainder to execute the offer for Macarthur, the world's largest producer of pulverized coal for steel production.
ArcelorMittal is the second-largest Macarthur shareholder behind China's Citic Group. Citic, which owns 24% of Macarthur, has been rumored to be considering its own bid for the coal company, but no formal offer has been made. Still, any deal for Macarthur would have to meet with Citic's approval.
Macarthur rejected an offer from Peabody and ArcelorMittal of about $17 a share, saying it wanted an offer closer to $19.80 a share. Peabody and ArcelorMittal are willing to pay the equivalent of $27 for each ton of Macarthur?s coal reserves and $3 a ton of its coal resources, Bloomberg News reported, citing a Morgan Stanley report.