Peabody, Arcelor Mittal bid US $5 B for Macarthur Coal

Peabody Energy has teamed up with Arcelor Mittal to offer US $5 billion for Australia’s Macarthur Coal, the world’s bigger producer of pulverised coal.

The offer comes only a day after Australia unveiled a plan to tax carbon emissions from the nation’s worst polluters or about 500 companies including coal miners. Despite black eyes from environmentalists, the global market for coal has never been better, with prices for the unique PCI coal mined by Macarthur trading at a narrowing discount to hard coking coal.

Macarthur was the subject of a three-way bidding war in 2010 and agreed to enter talks with Peabody, the highest bidder with a A$16 offer. However, talks collapsed after Peabody cut its offer when the centre-left Labor government slapped coal and iron ore miners with a mining tax. Steel giant ArcelorMittal is the second largest shareholder with a 16.2per cent stake in Macarthur, according to its website.

Citic Resources, Macarthur’s biggest shareholder, said it would study the offer. The proposal was conditional on receiving regulatory nod and getting 50.01per cent stake. “The Board makes no recommendation in relation to the Indicative Proposal but will seek to engage with Peabody and ArcelorMittal in relation to the price and terms,” Macarthur said in a statement.