Lump of coal

8 April 2010 By Christopher Swann

Don’t do dodgy deals. That’s a simple rule that Australian miner Macarthur forgot when it shortchanged shareholders while buying assets from commodities trader Noble. That made it vulnerable to American rival Peabody’s $3.3 bln bid. Market discipline can be a tough mistress.

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Australian miner Macarthur Coal rejected an increased $3.3 billion takeover offer from U.S. coal miner Peabody Energy on April 7.

On April 8, Peabody asked Australia's Takeover Panel to delay a meeting of Macarthur shareholders called to approve the firm's plans to acquire local rival Gloucester Coal. If approved this deal would give Hong Kongbased commodities firm Noble Group, which controls Gloucester, a 24.6 percent stake in Macarthur.

Macarthur is the world's biggest exporter of pulverized coal, controlling a third of the global supply. Macarthur said it would consider Peabody's sweetened offer, but told shareholders to take no action.

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