PERTH/MELBOURNE U.S. coal miner Peabody Energy BTU.N has asked Australia's Takeovers Panel to intervene in support of its $3.3 billion bid for Macarthur Coal MCC.AX, crying foul over its target's plan to buy a smaller local rival.
The panel said on Thursday that St. Louis-based Peabody had requested it to order Macarthur to defer an April 12 meeting of shareholders to approve Macarthur's plan to acquire Gloucester Coal GCL.AX.
Macarthur said there was no need to delay Monday's meeting as Peabody had yet to make a definite offer that Macarthur could put to its shareholders.
"It is disingenuous for Peabody to now seek to delay the shareholder meeting in circumstances where it has not made a binding offer to Macarthur shareholders," the company said.
The fraught maneuvering over Macarthur reflects the company's position as the world's biggest exporter of pulverized or PCI coal that is sought after by steelmakers, and is the latest in a flurry of coal deals in Australia, which have seen the number of large independent producers dwindle as mining majors turn to acquisitions to satisfy booming Asian demand.
Macarthur reiterated that it does not believe Peabody's A$14 per share "indicative non-binding proposal" is "capable of being a superior proposal" to its planned takeover of Gloucester.
Macarthur, led by CEO Nicole Hollows, this week rejected Peabody's sweetened bid, saying it still preferred its original plan to take over Gloucester -- a deal that would give Gloucester's main shareholder, Singapore-listed Noble Group (NOBG.SI), a one quarter stake in the expanded Macarthur.
An analyst said Peabody appeared to be looking to buy time while it tries to woo Macarthur's top three shareholders -- China's CITIC Resources Holdings (1205.HK) and steel giants ArcelorMittal SA (ISPA.AS) and South Korea's POSCO (005490.KS) -- into backing its deal instead of the takeover of Gloucester.
"It may be playing off the other shareholders in Macarthur who may not be particularly keen on the Gloucester angle and trying to get them on-side," said Peter Chilton at Constellation Capital Management, which does not own shares in Macarthur.
"The fact that Peabody increased their bid so quickly after the first one, suggests they're actually quite keen."
Peabody is offering Macarthur's top three shareholders the option of maintaining their combined 47.3 percent stake in a privatized Macarthur.
DILUTION OR OWNERSHIP SHIFT
The key question the three have declined to comment on so far is whether they would prefer Peabody controlling Macarthur or being diluted by Noble, which would become Macarthur's top stakeholder through the Gloucester deal.
"One of the major issues facing the top shareholders is the dilution in the Gloucester offer. So Peabody's offer for them to retain their interests is attractive, especially when steelmills are increasingly looking to hedge their costs exposure," said David Haddad, an analyst at RBC Capital Markets.
Peabody, whose bid hinges on the Gloucester deal failing, has argued to the panel that Macarthur should give its shareholders more information, including an independent valuer's report, before it goes ahead with the Gloucester vote.
The panel must decide in the next two days whether to order a postponement of the vote as mailed ballots are due on Saturday.
"In determining whether to adjourn the meeting, the fact that proxies are due on Saturday is an issue," Takeovers Panel director Allan Bulman told Reuters.
Then the panel must decide whether to rule on Peabody's complaint that Macarthur's shareholders need more information about the relative merits of its A$14 a share offer against the Gloucester deal before they vote on the latter.
"The failure by Macarthur to postpone the shareholders' meeting does not permit additional disclosure to be made and to allow its shareholders to consider all information relevant to the resolution proposed," Peabody said in its complaint.
Macarthur shares were up 0.7 percent at A$14.41 by 0350 GMT, holding slightly above the offer price in a slightly weaker broader market .
($1=1.079 Australian Dollar)