Macarthur Coal has swiftly rejected a $3.71 billion takeover bid by New Hope Corporation Ltd as inadequate.

The offer of 2.7 of New Hope shares for every Macarthur share held was launched today, trumping a $3.5 billion takeover offer for from US-based Peabody Energy Corporation.

The fresh offer came amid media reports that a third potential suitor, Swiss giant Xstrata Coal, could weigh into the tussle.

”The board of Macarthur met this morning and unanimously determined not to recommend the New Hope proposal to shareholders, as 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,” Mcarthur said in a statement.

”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.”

Separately, Australia takeover regulator turned down Peabody Energy’s appeal for the watchdog to prevent takeover target Macarthur Coal from seeking a shareholder vote on Monday for its planned takeover of a small local rival.

“The Panel has declined to conduct proceedings on an application from Peabody Energy Corporation in relation to the affairs of Macarthur Coal,” the Australia government’s Takeover Panel said in a statement late today.

Macarthur’s tilt

Macarthur’s board urged shareholders to vote in favour of its planned takeover of Gloucester Coal and an associated transaction with the target’s largest shareholder Noble Group at a shareholders’ meeting scheduled for April 12.

Macarthur’s shares ended the day up $1.19, or 8.3 per cent, at $15.55. New Hope shares closed 1 cent lower, or 0.2 per cent, at $5.30.

”The game has just started,” Paul Xiradis, who manages $10 billion as chief executive officer of Ausbil Dexia, told Bloomberg. ”It’s obviously a prize asset and people are bidding up for it. As a shareholder, I’m pretty pleased.”

Ausbil acquired its Macarthur stake last year at less than $10 each, Xiradis said.

The battle has helped make it the busiest start to a year for takeover offers of Australian companies in at least a decade. More than $US30 billion has been offered for Australian based companies in announced deals so far in 2010, according to data compiled by Bloomberg, more than double the $US14.1 billion in the same period last year.

Conditions

New Hope’s offer was binding, unlike Peabody’s, but both offers were conditional on Macarthur not proceeding with its deal with Gloucester, which has been backed by Gloucester’s board.Macarthur said the meeting would proceed but may be postponed or adjourned if there is a material change in circumstances.

”The board believes that all information necessary for the shareholders to make an informed decision on the resolution to be put to shareholders at the EGM (extraordinary general meeting) is available to them,” Macarthur said.

This was in response to Peabody, which had unsuccessfully called on the Takeovers Panel to order the meeting in Brisbane to be deferred on the basis that Macarthur shareholders had not been provided with sufficient information to consider the merits of its proposal.

”The Macarthur board urges shareholders to not have any regard to public statements issued by New Hope or any other third party,” Macarthur said.

Macarthur also said its independent expert, Lonergan Edwards & Associates, did not need to update its report dated February 26.

The report valued Macarthur at between $9.84 and $12.49 per share.

New Hope’s offer values Macarthur at $14.58 per share based on the both companies’ closing share price on Wednesday, while Peabody has bid $14 per share.

Unfair, unreasonable

The independent expert’s report also said that Macarthur’s issue of shares to Noble at $9.70 per share under the Gloucester/Noble deal was not fair but was reasonable.

Several media reports claim Xstrata Coal plans to make an offer for Macarthur.

Reports in mid-2008 also suggested Macarthur was in talks with Xstrata about a potential takeover.

Macarthur said on Friday it had ”not received any approach from Xstrata”.

Separately, Singapore-based trading house Noble said in a statement that the Gloucester-Macarthur merger proposal was “designed for those that want to ride along with coal”.

”Our proposal only works for people with a longer-term bullish view on where coal is going.”

Noble has offered $12.60 per share to mop up the remaining shares in Gloucester that it does not already own, in the event Macarthur does not takeover Gloucester.

New Hope’s shares were four cents higher at $5.35 while Gloucester’s shares were up 51 cents, or 4.34 per cent, at $12.26.

Shayne Heffernan www.livetradingnews.com AAP, with Bloomberg

Posted by Shayne Heffernan on Apr 9th, 2010and filed underAsia, Commodities, Latest News, Markets, Shayne Heffernan.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site