re-- macarthur ditches donaldson bid

Found this article in the bull yesterday, does say why Macarthur had to amend the initial proposal.



Macarthur Coal Ltd has abandoned part of its multi-pronged transaction package with joint venture partner Noble Group Ltd but will proceed with a deal central to its growth plans.

Macarthur has ditched its bid to purchase Noble's 79.9 per cent stake in Donaldson Coal Holdings Pty Ltd for $185.8 million.

"Macarthur and Noble have agreed not to proceed with the proposed transaction in relation to Donaldson," Macarthur said in a statement on Friday.

A Macarthur spokesman said talks over the Donaldson acquisition failed when the parties reached an impasse over the value of port access owned by Donaldson.

"We got to the point where we came to the conclusion we couldn't generate enough value for Macarthur shareholders," the spokesman said.

However Macarthur will acquire Noble's stake in the Middlemount project in Queensland to give it full ownership of the operation and drive its goal to double production in the next five years.

Under the Middlemount deal, Macarthur will pay a mix of shares and cash with an implied value of $218.3 million.

The Middlemount transaction is subject to Macarthur's takeover offer for Gloucester Coal Ltd becoming unconditional and Noble, Gloucester's major shareholder with an 87.7 per cent stake, accepting the Gloucester bid.

"Macarthur will proceed with the Gloucester offer and the Middlemount transaction," Macarthur said.

Macarthur has offered $8.00 cash for each Gloucester share held, or 0.84 Macarthur shares for each Gloucester share held.

Based on Macarthur's closing share price on Friday of $9.45, which was down 81 cents, this values its target at about $650 million.

"The acquisition of Gloucester and Noble's interest in Middlemount will create significant value for Macarthur shareholders by creating a more diverse business with exposure to multiple product types, geographies and mining operations," Macarthur managing director Nicole Hollows said.

Macarthur aims to become Australia's largest independent coal producer.

The miner said it expected to send out a bidders statement to Gloucester shareholders in early March.

Gloucester's directors have unanimously recommended the offer, which is expected to close in early May.

Macarthur's expansion plans also included the acquisition of all CITIC Resources Holdings Ltd's direct interests in some of Macarthur's operating assets, in return for $110 million worth of Macarthur shares at $9.70 each.