UPDATE 2-New Hope sprinkles cash into Macarthur Coal bid

* New Hope adds cash option to $3.3 bln Macarthur bid

* Says cash alternative capped at A$950 million

* Says offer not subject to financing or due diligence

* Offer comes after stock market’s close
(Adds comments from New Hope chairman, details)

By Fayen Wong

PERTH, April 14 (BestGrowthStock) – Australian coal miner New Hope
Corp (NHC.AX: ) bolstered its $3.3 billion bid for Macarthur Coal
(MCC.AX: ) with cash on Wednesday, saying it had discussed its
revised offer with Macarthur’s leading shareholders.

Macarthur, the world’s top exporter of PCI coal, a cheaper,
cleaner-burning coal coveted by steelmakers, is at the centre
of a takeover tussle between New Hope and U.S. miner Peabody
Energy (BTU.N: ). Both insist Macarthur calls off a plan to buy
smaller rival Gloucester Coal Ltd (GCL.AU: ) as a condition of
their bids.

Under New Hope’s revised offer, Macarthur shareholders can
opt for 2.7 New Hope shares for every Macarthur share, or
A$14.50 in cash — though the cash option is capped at a total
payout of A$950 million.

“We’ve spoken with all Macarthur major shareholders and
they are obviously pretty non-committal when you’re talking to
them,” New Hope Chairman Robert Millner told Reuters.

“But they have all expressed their point of view, which has
made us decide to revise our offer. This is now the best offer
on the table.”

Throwing in a cash option may also have been prompted by a
dip in New Hope’s share price, said one analyst at a major
investment bank.

“The revised offer is clearly more attractive to
institutional investors that could be looking to cash out from
their positions,” said the analyst, who declined to be
identified as he was not authorised to speak to the media.

“If one was to go by its (New Hope’s) original offer, the
implied value would be lower than Peabody’s all-cash offer.”

New Hope shares have shed 3 percent since Friday to A$5.15,
meaning the implied value of its original all-share offer has
fallen to A$13.91 — versus Peabody’s A$14 a share cash offer,
and some way below Macarthur’s share price of A$15.50.


For NEWSMAKER on Macarthur CEO: [ID:nSGE63607A]

For FACTBOX on pulverised coal [ID:nSGE638013]

For related BREAKINGVIEWS: [ID:nLDE6371OP]

For Graphic on China coal imports:


For Graphic on forecast Australian coal exports:



If the cap were reached, shareholders would receive the
cash on a pro-rata basis and the rest in shares.

Macarthur’s three major shareholders — China’s CITIC
Resources (1205.HK: ) and steel giants ArcelorMittal (ISPA.AS: )
and South Korea’s POSCO (005490.KS: ) — own a combined 47.3


Investors hoping coal giant Xstrata Plc (XTA.L: ) may enter
the fray with a bid topping A$16 a share stand to be

Macarthur shares surged to a 21-month high of A$17.17 on
Monday, but have since lost nearly 10 percent as talk of
Xstrata bidding has petered out.

Switzerland-based Xstrata has said it was focused on
organic growth and would look at acquisitions only on an
“opportunistic” basis.

Macarthur has previously rejected offers from New Hope and
Peabody, preferring its initial plan to acquire Gloucester as
part pf a deal that would give commodities firm Noble Group Ltd
(NOBG.SI: ), a major shareholder in Gloucester, a one-quarter
stake in Macarthur.

POSCO said on Tuesday it has no current plans to sell its
8.3 percent stake and wanted to keep Macarthur as a stable
supplier, while CITIC Resources had yet to decide how to vote
at an extraordinary meeting on Monday to approve the Gloucester
deal. [ID:nSGE63C025]

Stock Market Analysis
(Editing by Ian Geoghegan)
($1=1.076 Australian Dollar)

UPDATE 2-New Hope sprinkles cash into Macarthur Coal bid