Looking at the Australian coal mining sector, who would be the other takeover candidates for Peabody? I think the basic requirements would be:
1) The miner needs to be able to scale to at least 10 million tons per year within three years. Only that magnitude is going to make a dent for a large company like Peabody. This implies the resource is large and also that it is close enough to rail and port infrastructure.
2) The miner needs to have an existing operation producing at least a few million tons per year. I think Peabody doesn't want exploration risk, but wants to buy a going operation.
So other than Macarthur, who might Peabody target?
MCC Price at posting:
$13.26 Sentiment: None Disclosure: Not Held
