UPDATE 1-Australia Macarthur lets Peabody start due diligence

* Peabody starts due dilligence, has until May 3

* Macarthur shares trade slightly above Peabody’s A$16

* Macarthur: Gloucester merger still open, but conditional
(Adds details, share price)

PERTH, April 23 (BestGrowthStock) – Australian takeover target
Macarthur Coal Ltd (MCC.AX: ) on Friday let Peabody Energy
(BTU.N: ) inspect its books till May 3, paving the way for the
U.S. coal major to formalise a A$4.07 billion ($3.78 billion)

Macarthur, already the target of two rival bids worth over
A$3.7 billion , is the world’s biggest exporter of pulverized
coal, a cheaper, cleaner coal coveted by steel makers which are
ramping up to meet red-hot Asian demand.

The due dilligence process will largely focus on the terms
in Macarthur’s key contracts and potential changes in control,
and an acceptable offer from Peabody can end the three-week
takeover battle.

In the same statement Macarthur added that its proposal to
buy smaller local rival Gloucester Coal Ltd (GCL.AX: ) remains
open, although conditional. It did not disclose the conditions.

Macarthur’s shares have fallen more than five percent from
its one-year high of A$17.17 struck on April 12 as expectations
of third bidder emerging peters out and as New Hope Corp
(NHC.AX: ) seems reluctant to sweeten its A$14.50 a share offer.

Macarthur shares were up 0.12 percent at A$16.20 by 0307
GMT, slightly above Peabody’s offer, suggesting investors
believed that the U.S. major would need to pay a bit more to
win support from Macarthur’s board.

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($1=1.078 Australian Dollar)
(Reporting by Fayen Wong; Editing by Narayanan Somasundaram)

UPDATE 1-Australia Macarthur lets Peabody start due diligence