ArcelorMittal , the world’s largest steel maker, has unexpectedly pulled out of its joint $5-billion (U.S.) bid with Peabody Energy Corp. for Australian miner Macarthur Coal Ltd., just a day after the buyers said they had secured a majority of shares.
In a joint statement sent to Australian regulators by Peabody’s legal advisers, ArcelorMittal and Peabody said the steel giant had “elected to sell its interest” in their bid vehicle, PEAMCoal, instead of proceeding with a joint venture.
ArcelorMittal did not say why it was selling out and was not available for comment.
Peabody and ArcelorMittal bid $16 (Australian) per share for the coal miner offer and said on Monday they already had a relevant interest in about 59.85 per cent of the shares.
China’s Citic, which owns a quarter of Macarthur, said on Friday it had accepted the offer despite speculation it had been holding out for a higher price or could launch a rival offer of its own.
The last remaining major shareholder in Macarthur yet to accept the offer is South Korean steel maker POSCO, which owns a 7.25 per cent stake.
If POSCO accepts the offer, that could help push acceptances above 90 per cent, which would lead to Peabody raising the offer to $16.25 a share.
Peabody said in Tuesday’s statement that it would now own 100 per cent in PEAMCoal and become owner of all the Macarthur shares that are tendered in the bid.
Shares in ArcelorMittal were 1.9 per cent higher at €14.71 Tuesday morning, when the STOXX Europe 600 Basic Resources sector index was up 0.8 per cent.
Under the terms of its agreement with Peabody, ArcelorMittal must continue funding PEAMCoal for a further 90 days, the statement said.
ArcelorMittal and Peabody put in a bid for Macarthur in July, which the pair eventually took hostile in August after the Macarthur board said the bid undervalued the company.
A previous bid by Peabody to acquire Macarthur last year collapsed after Peabody cut its offer, blaming a new government mining tax.