Macarthur rejects New Hope bid

New Hope Corporation Ltd has become the second contender for Macarthur Coal Ltd,
trumping an earlier offer by US-based Peabody Energy Corporation.
However, Macarthur was quick to reject the New Hope bid, and quashed media
speculation that Swiss giant Xstrata Coal could also become a suitor.
Macarthur said in a statement on Friday that it had "not received any approach from
Xstrata".
The target said it had rejected the $3.71 billion takeover bid by New Hope, saying
it did not represent an adequate premium for control of the company.
It was the third offer that Macarthur has rebuffed as inadequate in the past 10 days
and follows Peabody's revised $3.5 billion offer earlier this week.
New Hope's offer of 2.7 of its shares for each Macarthur share held valued Macarthur
at $14.58 per share based on both companies' closing share price on Wednesday.
Peabody had bid $14 per share, up from its initial $13 per share offer on March 31.
Macarthur's shares closed $1.19, or 8.29 per cent, higher at $15.55 on Friday, well
above both bids.
The shares hit an intraday high of $16.03.
Macarthur said that its board had unanimously determined not to recommend the New
Hope proposal to shareholders.
New Hope shares closed down one cent at $5.30.
"The board has formed the view that the scrip ratio of 2.7 New Hope shares for every
Macarthur share does not represent an adequate premium for control of the company,"
the target said.
"The proposal consists of a scrip offer with no cash alternative and requires the
approval of 75 per cent of votes cast at a scheme meeting."
Macarthur's board again urged shareholders to vote in favour of its planned takeover
of Gloucester Coal Ltd and an associated transaction with Gloucester's largest
shareholder Noble Group Ltd, at a shareholder meeting scheduled for April 12 in
Brisbane.
Macarthur has now postponed the meeting by one week and it will now be held on April
19.
New Hope's offer is binding, unlike Peabody's, but both offers were conditional on
Macarthur not proceeding with its Gloucester deal, which has been backed by
Gloucester's board.
Macarthur said the shareholders' meeting would proceed but may be postponed or
adjourned if there was a material change in circumstances.
Macarthur said shareholders had enough information to make an informed decision at
the meeting.
Peabody had unsuccessfully called on the Takeovers Panel to order the meeting to be
deferred on the basis that Macarthur shareholders had not been provided with
sufficient information to consider the merits of its proposal.
Macarthur also said its independent expert, Lonergan Edwards & Associates, did not
need to update its report dated February 26 - despite this valuing Macarthur at
between $9.84 and $12.49 per share.
The independent expert's report said that Macarthur's issue of shares to Noble at
$9.70 per share, as part of the Gloucester takeover, was not fair but was
reasonable.
It is proposed the shares will be issued in exchange for Noble's interest in the
Middlemount coal mine in Queensland and its 87.7 per cent interest in Gloucester.
Noble, a Singapore-based trading house, continues to talk up the proposed deal,
which would give it a 24 per cent stake in a combined Macarthur/Gloucester.
Noble is also poised to mop up the remaining shares in Gloucester that it does not
already own, with a $12.60 per share offer, if Macarthur does not end up taking over
Gloucester.
Gloucester's shares finished 45 cents, or 3.93 per cent, higher at $12.20.
CMC Markets analyst David Taylor said "the tables will no doubt turn" if an offer of
more than $15 a share was received by Macarthur.
"This is a corporate drama of the likes not seen since the global financial crisis,
and will take weeks, if not months to play out," Mr Taylor said.



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