Peabody Energy and ArcelorMittal look certain to take over Queensland miner Macarthur Coal after an about-face by China’s CITIC, which will realise $1.2 billion by selling its shareholding.
Analysts said the deal meant there were almost no independent coal miners left in Australia for foreigners to invest in.
State-owned CITIC Resources Holdings and CITIC Group intend to accept the offer for Macarthur shares from PEAMCoal, the bidding vehicle, US miner Peabody Energy and European steelmaker ArcelorMittal said on Friday.
The suitor’s ownership of Macarthur is now 49 per cent – CITIC represent 25.2 per cent of Macarthur shares – with 50.01 per cent needed for a change of control.
The $4.9 billion offer is for $16 per Macarthur share, which will increase to $16.25 if they achieve a 90 per cent stake by November 11.
Macarthur shares lifted by 14 cents, or 0.87 per cent, to $16.22 on Friday.
CITIC will earn $1.2 billion by selling its share after previously holding out for a better deal, as had Macarthur’s board.
Paterson Securities analyst Andrew Harrington told AAP he thought the offer was a good one for Macarthur and he did not think a better bid would emerge.
“There’s been plenty of time and plenty of water has gone under the bridge for anyone else to come out of the woodwork, and nobody has,” he said of the bid which was announced nearly four months ago.
Mine Life senior resources analyst Gavin Wendt said the bid highlighted how attractive Australia’s booming coal industry was to international companies.
CITIC rejected several previous takeover offers by Peabody, with it reluctant to give up its access to Macarthur’s pulverised coal injection (PCI) coal – a lower-cost variety of coal used in steel making.
“The CITIC guys liked having access to the quality coal Macarthur put out, but the bidders knew if they could come up with an attractive enough price those other major shareholders would agree to sell,” Mr Wendt told AAP.
“Macarthur is a producer and the cupboard’s going to be pretty much bare as far as independent producers, now another one’s off the market.
“If you are a foreign investor in the coal space, it’s going to be very difficult for you to buy into an existing independent coal producer.”
Emerging coal companies would not be in production until 2015-15, he said.
Peabody chief executive Gregory Boyce announced the acceptance by CITIC on Friday in a statement, saying it delivered full value to Macarthur shareholders.
Taking a 90 per cent stake in Macarthur would allow PEAMCoal to compulsorily acquire all remaining Macarthur shares.
“We now urge all Macarthur shareholders to accept our offer as soon as possible, in order to maximise their chances of receiving the increased offer price,” ArcelorMittal chief financial officer Aditya Mittal said.
