australia\s macarthur soars on 5 billion bid
Last Updated : GMT 10:30:02
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Australia\'s Macarthur soars on $5 billion bid

Arab Today, arab today

Arab Today, arab today Australia\'s Macarthur soars on $5 billion bid

Sydney - Afp

Shares in Australian coal miner Macarthur Coal rocketed Tuesday, closing up almost 37 percent, after a record Aus$4.68 billion (US$5.0 billion) joint takeover bid from two major foreign firms. Dealers said the offer from US company Peabody Energy and European steelmaking giant ArcelorMittal had boosted coal companies, just days after the government announced a new carbon pollution tax that will hit the sector. Shares in Macarthur, which ended Monday at Aus$11.08, closed at Aus$15.14 -- an increase of 36.6 percent -- while other coal companies also rose despite a steep fall on the broader market. CMC Markets analyst Ben Le Brun said the closing price was below the Peabody and ArcelorMittal bid of Aus$15.50 per share which, if successful, would be the largest takeover bid for a coal company in Australian history. \"Because Peabody has actually tried to bid for Macarthur before and it was an unsuccessful bid... I think that there\'s still a bit of a bad taste in some investors\' mouths in terms of how that ended up,\" he said. Macarthur, the world\'s top producer of a pulverised coal used to make steel, has rejected several previous takeover bids from Peabody. \"Certainly there\'s still a lot speculation that that\'s not going to be the only bid for Macarthur that we see,\" Le Brun said. \"It\'s certainly a very treasured asset. It\'s almost like a jewel in the crown in the coal space,\" he said of the company, which operates two mines in Queensland and has plans to double 2009 production capacity by 2014 through expansion. Analysts said the renewed takeover interest in Macarthur was helping support the coal sector. \"It\'s quite ironic as coal stocks were expected to be hit hard by the carbon tax, yet they\'re the better performers than their other resource counterparts,\" Austock Securities senior client adviser Michael Heffernan told AAP. Gloucester Coal shares ended up 3.9 percent, Whitehaven added 2.79 percent and New Hope rose 1.56 percent, while the S&P/ASX 200 closed down 1.9 percent amid concerns over the eurozone debt crisis. RBS Morgans private client adviser Bill Bishop said coal stocks were the best performers in a market rattled by overseas uncertainty. \"That\'s some good news amongst the carnage,\" Bishop said. \"It\'s confirmation the resources boom is not dead, it\'s just the market reacting pretty savagely to uncertainty overseas.\" Prime Minister Julia Gillard also seized on the takeover bid, saying it demonstrated her carbon tax would not cripple industry. \"You couldn\'t get a better indication that business people see a good future in coal mining in this country,\" she told ABC radio. Australian miners, including a major coal industry body, have warned the new pollution tax would force mine closures and thousands of job losses, seriously damaging the industry that is a key driver of Australia\'s economy. The government has pledged to provide a Aus$1.3 billion package to the coal industry to offset the impact of the tax, which will move to an emissions trading scheme with the carbon price set by the market by mid-2015. The Australian Coal Association said the Macarthur deal was not a vote of confidence in the carbon tax, which will be levied on the top 500 carbon polluters and initially be priced at Aus$23 per tonne. \"This is a massive industry, Aus$50 billion of export, 3.5 percent of the GDP,\" executive director Ralph Hillman told AAP. \"We are still going to be a major exporter of coal.\" Macarthur said Monday it was making no recommendation in relation to the indicative proposal as yet, but was seeking \"to engage with Peabody and ArcelorMittal in relation to the price and terms\".

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