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Kevin Andrusiak and John Durie | May 21, 2008
MYSTERY buyer snapped up 10.4 per cent of Queensland miner Macarthur Coal just after trading closed last night, putting through 22.09 million shares at $20 -- an 8 per cent premium to the ruling market price of $18.38 -- via broker Macquarie.
The seller is almost certainly Queensland mining entrepreneur Nathan Tinkler, whom the Macarthur Coal website lists as holding a parcel of that size.
The buyer is tipped to be one of several bidders, including the Mittal steel group of India. Arcelor Mittal, as it is now called, is the biggest steel company in the world.
Macarthur exports a specialised type of coal that costs less than coking coal but can be used in pulverised coal injection (PCI) blast furnaces of a type that Mittal operates at several locations around the world.
Another possible buyer might be Swiss-based miner Xstrata, which already has extensive coal and base metal holdings in Queensland via its takeover of MIM Holdings in 2003 for $4.9 billion.
Mr Tinkler was given his shares just over a year ago in exchange for a private coal mine.
At last night's price, a bidder would have to pay $4.2 billion to hope to take control of Macarthur, assuming other shareholders fell into line, and assuming that a foreign bidder could obtain the approval of the Foreign Investment Review Board to make a bid.
The real arbiter of the success of any full takeover bid would be Macarthur founder Ken Talbot, who owns 24 per cent of the stock and has reportedly said he might be a seller at $20 a share.
Second biggest holder is Chinese investment group Citic Australia Coal Pty Ltd, which controls 17.66 per cent and is regarded more as a likely buyer than a seller.
The deal comes despite reports from Macarthur earlier yesterday that bottlenecks at the Dalrymple Bay loader in Queensland would bring down its earnings.
The company said it expected profit from coal sales to be $39-$47 million for 2007-08, down on $66.5 million booked for the previous financial year.
Macarthur suggested full-year profit could rise to $75 million if it included a $28 million provision for the January sale of its interest in the Monto Coal 2 operation to Noble Group.
Macarthur, which declined to give any guidance at last month's half-yearly results, blamed infrastructure constraints for its weaker profit.
The lower guidance comes despite a massive increase in coal prices due to increased demand from Asia that came into effect from April 1.
The company said in a statement that it had started to book improved revenues in the June quarter after the settlement in coal contract prices for 2008 saw a 200 per cent rise for coking coal.
The expected result is also largely in line with analyst expectations of earnings of around $47 million.
The market is predicting that earnings will improve to around $350 million in 2008-09 because of improved port allocation at Dalrymple Bay and expanded production.
Macarthur had forecast total sales of 4 million tonnes of coking coal for the fiscal year. If the results come in at the lower end of its profit guidance of $39 million for 2007-08, Macarthur's profit margins would be about $10 per tonne of coal.
Macarthur declined to say in its profit guidance -- which was released after the market close last night -- whether it would reach the 4 million tonne mark for 2007-08.
Macarthur shares retreated 7c to $18.38 during trading.
MCC Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
