today in business spectator breakfast deal

Macarthur Coal?s US suitor Peabody may be in the box seat for now but this deal may not be a one-horse race, with Swiss-miner Xstrata seen as a likely counter-bidder. And that?s not the only takeover battle Xstrata may be keen on joining


In a separate paragraph:
Macarthur Coal, Peabody Energy, Xstrata

Macarthur Coal?s US suitor Peabody Energy is certainly confident of snaring its target and it?s a point that the company?s president Rick Navarre has been quick to drive home to the market. Some of this confidence is not misplaced, given that Peabody has teamed up with a major Macarthur shareholder in Arcelor Mittal and can count on the Indian steelmaker?s 16 per cent stake in the target. That makes the finishing mark of 50 per cent acceptances an achievable one for Peabody, provided everything goes well during the due diligence process. However, it might be a bit too early to discount the possibility of counter-bidders coming out of the woodwork. That view was further emboldened yesterday after another major Macarthur shareholder, Citic Group ? one that may have a significant bearing on the end result ? told Reuters that it was weighing up all of its options before responding to the situation. Presumably one of those options could be a counterbid, possibly in tandem with a cashed-up party. Just who this might be is anybody?s guess but the likes of Rio Tinto, Xstrata and commodities firm Noble Group could all fit the bill. According to The Australian, the most likely contender for the moment is Xstrata, which had a look last year, and would have a good idea of what?s on offer here. Rio Tinto is reportedly not keen just yet, while Chinese and Indian parties could also enter the fray. We should get a clearer picture of the playing field by the end of next week once Peabody and Arcelor complete their due diligence.