UPDATE 2-Macarthur says received no proposal from Xstrata

* Macarthur says no offer from Xstrata

* Says reviewing option after collapse of Gloucester merger

* Macarthur could run an auction of its assets – analysts
(Adds details, Macarthur’s share price, analyst comments)

By Fayen Wong

PERTH, April 20 (BestGrowthStock) – Global miner Xstrata Plc
(XTA.L: ) looks to be keeping to the sidelines of a takeover
battle raging for Australia’s Macarthur Coal Ltd (MCC.AX: ),
despite persistent speculation that it could enter the fray
with a knockout bid.

Macarthur, already the target of two rival bids worth more
than $3.4 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.

Macarthur said Xstrata had not put forward any proposal,
leaving U.S. miner Peabody (BTU.N: ) as top bidder ahead of rival
suitor New Hope Corp (NHC.AX: ), another Australian coal miner.

Xstrata, which has declined comment, surfaced as a possible
bidder after Macarthur previously revealed the London-listed
firm had held talks with some of Macarthur’s shareholders.

Despite Xstrata’s no-show at this stage, Macarthur shares
still gained on Tuesday, supported by the effective demise of a
separate deal that would have spelt the end of the bid battle.

On Monday, Macarthur’s original plan to take over local
rival Gloucester Coal (GCL.AX: ) was dealt a mortal blow, after
shareholders in Gloucester’s parent company, Noble Group Ltd
(NOBG.SI: ), voted against the transaction.

Macarthur said it was reviewing its position on that deal,
which was hatched well before the battle for Macarthur erupted.

Macarthur shares stood 0.5 percent higher in afternoon
trade at A$16.62, far above Peabody’s A$16 a share offer and
suggesting investors still expect the bidding to go higher
still. Peabody’s cash offer values Macarthur at A$4.07 billion
($3.8 billion).

Local media continue to stoke speculation that Xstrata will
join the bidding, with the Australian Financial Review saying
in an unsourced report that Xstrata had sounded out Macarthur’s
top shareholders with a plan to inject two of its coal assets
into Macarthur in return for at least 35 percent of the

“The Macarthur board … confirms that it has not received
any proposal from Xstrata or its representatives,” Macarthur
said in a statement.

Patersons Securities coal analyst Andrew Harrington said
Macarthur’s share price could be a stumbling block for Xstrata.

Macarthur’s shareholders are keeping their options open.

CITIC, a founding Macarthur shareholder with 22.4 percent,
says it needs more information before deciding whether to
accept Peabody’s offer, while two other major shareholders,
steelmakers ArcelorMittal and POSCO, are also keeping their
options open.

POSCO, which owns 8.3 percent of Macarthur, has given
in-principle backing to Peabody’s offer while ArcelorMittal,
with 16.6 percent, says the bid merits consideration.

Macarthur produced 4.6 million tonnes of coal in 2009 while
Gloucester produces annually a combined total of about 2.5
million tonnes of coking and thermal coal.

The demise of the Macarthur-Gloucester deal leaves
Gloucester with yet another deal to consider: a Noble offer to
buy out the rest of the company for A$12.60 a share in cash.
Gloucester shares last traded at A$12.18.

(Editing by Mark bendeich)
($1=1.080 Australian Dollar)

UPDATE 2-Macarthur says received no proposal from Xstrata