Macarthur Coal has rejected Peabody Energy’s $3.5 billion approach saying the bid is not high enough.
The Australian coal miner knocked back the bid as it was still “too low”, after Peabody increased the offer from its earlier $3.3 billion bid.
The offer jumped on Tuesday from $13 per share up to$14.
“All I’d say about our major shareholders — and most of our shareholders — is they believe the price being offered is a long way short of the mark,” Macarthur chairman Keith DeLacy reportedly told The Australian.
Instead, Macarthur has stated that it will go ahead with its takeover of Gloucester Coal, and that Peabody’s offer did not take into account the value of merged entity.
“Peabody’s offer is conditional on Macarthur not proceeding with a proposed takeover of smaller rival Gloucester Coal and an associated transaction with Gloucester’s largest shareholder, Singapore-based Noble Group,” the company stated.
Macarthur has called a meeting for 12 April to discuss the acquisition of Gloucester, with Peabody stating that its takeover bid will lapse if shareholders approve the Gloucester takeover.
“Peabody is serious about its proposal to the Macarthur board and is seeking re-engagement as soon as practicable so we can further progress the proposal,” a spokeswoman told The Australian.
After the acquisition of Gloucester, Noble plans to increase its stake in Macarthur.
The Australian coal miner has stated that the predicted price rise in PCI coal, with some analysts forecasting a doubling in the price, as one of the reasons behind the rejection of the bid.