Macarthur terminates Gloucester deal

Finance

Publishing Date: 14 May 2010 10:52am GMT
Author: Mining Journal

Macarthur Coal Ltd has officially put an end to its takeover bid for Gloucester Coal Ltd after months of negotiations.

The Australian company said that both parties had mutually agreed to terminate the “bid implementation agreement” entered on December 22 last year.

A takeover of Gloucester had been in doubt since Peabody made a more substantial offer for Macarthur’s shares last month.

Originally, Peabody made a A$16/share cash bid for Macarthur, before lowering that offer to A$15/share after the Australian government announced its resource super-profits tax.

The failure of the deal will no doubt disappoint commodities trader Noble Group Ltd, which owns an 87.7% interest in Gloucester and would have gained about a quarter of Macarthur if the deal took place.

Last month, Noble’s shareholders voted down an injection of assets into Macarthur through the Gloucester bid when it announced it would engage with Peabody.

Noble said at the time: “We are sick of sitting around as the patient backstop to allow Macarthur to be shopped to the world. We feel like the patient suitor driving the prom queen to all her dates.”

Macarthur operates two mines in Queensland’s Bowen Basin and plans to double its production capacity in the next five years through development of the Middlemount project.