Thursday May 22, 2008
Arcelor-Mittal buys Macarthur Coal stake
PERTH: Arcelor-Mittal, the world’s top steel maker, has entered talks about a transaction with Australia’s Macarthur Coal after paying US$604mil for a near 15% stake in the firm, sending the coal miner’s shares to a record high.
Soaring coal prices, driven by tight supply and voracious demand from fast industrialising China and India have put Australia’s mining sector in play amid a global resources grab.
But investor hopes of a potential bidding war for the miner waned after Macarthur said in another statement yesterday that talks with a separate, unnamed third party had ended.
“It is a little disappointing but there are still a lot of expectations that Arcelor will launch a full takeover of the company, which explains why Macarthur’s shares are still up strongly,” said Mark Pervan, a senior commodities analyst at the Australian & New Zealand (ANZ) Bank.
“Macarthur also has a lot of takeover appeal, so there might be other interested parties out there who may make an offer.”
Arcelor paid about A$630mil for the 14.9% stake, or about A$20 per share, a 9% premium to Macarthur’s closing price on Tuesday.
Private investor Nathan Tinkler, who owns a 10.4% stake in Macarthur, was the likely seller, The Australian newspaper reported yesterday. A trade of 22.09 million shares at A$20 a share was completed after the Tuesday close.
Shares in Macarthur initially rose over 14% to hit a life high of A$20.98. But the stock later shed some gains to settle 8% higher at A$19.86, after it said it has ended talks with the unnamed third party.
Its shares have jumped nearly 54% since April 18 after it said it was in takeover talks with an unnamed group.
China’s state-owned CITIC Group, which owns 19.9% of Macarthur, is considering a bid to raise its stake in the coal miner in a deal estimated to be worth US$830mil, the South China Morning Post reported earlier this month.
The paper said Switzerland-based mining giant Xstrata Plc was also in takeover talks with Macarthur’s founder Ken Talbot, who has been selling down his stake of around 24%.
Macarthur, which supplies more than a third of the world’s pulverised coal used in steel making, holds a 73.3% stake in each of two mines in eastern Australia capable of yielding around 6.5 million tonnes of coal prized by steel mills and power generators annually. – Reuters
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