Macarthur caved in at an offer well below what it pressed for earlier in August, after fending off four takeover attempts in three years and opening its books to other potential suitors. Theyre bowing to the inevitable, really, said Peter Chilton, an analyst at Constellation Capital Management.
Top US coal miner Peabody and ArcelorMittal raised their offer for the worlds biggest producer of pulverized coal by 3% to A$16 a share.
The new offer is 44% above Macarthurs last trade on July 11, the day the initial approach was announced. The latest bid includes a A$0.16 a share dividend for a total offer value of A$16.16. A$18 may have been an aspirational target, but there comes a time when you have to face reality unless there's lots of other bidders at the table, Chilton said.
After Peabody and ArcelorMittal completed their review of Macarthurs books, Macarthur said on August 1 it would be willing to recommend a A$16 a share offer on condition it would be raised to A$18 a share, if the suitors won more than 90% acceptances.
Peabody and ArcelorMittal rejected that proposal, and Macarthur has now caved in, trapped in part by the recent share market turbulence and investor concerns about global growth. People are more nervous about China and coal, following the correction in share markets. That also influences what people are prepared to do, said Chilton.