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BREAKFAST DEALS: Xstrata watchSupratim Adhikari

Published 7:42 AM, 21 Jul 2011 Last update 7:42 AM, 21 Jul 2011

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Macarthur Coal?s US suitor Peabody may be in the box seat for now but this deal may not be a one-horse race, with Swiss-miner Xstrata seen as a likely counter-bidder. And that?s not the only takeover battle Xstrata may be keen on joining, with talk that it may also be having a look at Sundance Resources. Meanwhile, BHP?s latest shale gas deal angers one Petrohawk shareholder as Deutsche Bank analysts highlight the mining giant?s next target in the sector. In other news, rural property investor, PrimeAg?s plans to set up a new unlisted agri-fund with the help of the Future Fund are thrown into disarray, MAp decides to return cash to its shareholders and Linc Energy backs out of its recent US acquisition.

Macarthur Coal, Peabody Energy, Xstrata

Macarthur Coal?s US suitor Peabody Energy is certainly confident of snaring its target and it?s a point that the company?s president Rick Navarre has been quick to drive home to the market. Some of this confidence is not misplaced, given that Peabody has teamed up with a major Macarthur shareholder in Arcelor Mittal and can count on the Indian steelmaker?s 16 per cent stake in the target. That makes the finishing mark of 50 per cent acceptances an achievable one for Peabody, provided everything goes well during the due diligence process. However, it might be a bit too early to discount the possibility of counter-bidders coming out of the woodwork. That view was further emboldened yesterday after another major Macarthur shareholder, Citic Group ? one that may have a significant bearing on the end result ? told Reuters that it was weighing up all of its options before responding to the situation. Presumably one of those options could be a counterbid, possibly in tandem with a cashed-up party. Just who this might be is anybody?s guess but the likes of Rio Tinto, Xstrata and commodities firm Noble Group could all fit the bill. According to The Australian, the most likely contender for the moment is Xstrata, which had a look last year, and would have a good idea of what?s on offer here. Rio Tinto is reportedly not keen just yet, while Chinese and Indian parties could also enter the fray. We should get a clearer picture of the playing field by the end of next week once Peabody and Arcelor complete their due diligence.

Sundance Resources, Hanlong Mining, Xstrata

Meanwhile, the takeover tussle for iron ore target Sundance Resources looks set to get interesting, with the company?s major shareholder and suitor Hanlong Mining reportedly facing some competition. Hanlong has pitched a $1.4 billion bid to get its hands on the attractive, but potentially politically tricky Mbalam project in West Africa, however the Australian Financial Review reports that a heavyweight miner is also in Sundance?s data room. The name bandied around is again Xstrata, so the Swiss miner certainly seems active, while Anglo American has also been mentioned as a potential candidate. The rival suitor has already had a look at the project and this is exactly the sort of speculation that Sundance has been hoping for as it looks to extract a better deal from Hanlong. Meanwhile, the AFR also reports that Hanlong has added Deutsche Bank to its list of advisers.