0154 GMT [Dow Jones] Citi analysts say New Hope's (NHC.AU) share-based offer for Macarthur Coal (MCC.AU) is unlikely to succeed as it will not be attractive to major shareholders ArcelorMittal (MT), Posco (005490.SE) and Citic (1205.HK). "The companies would have diluted stakes in a more illiquid company than exists now," Citi says. New Hope could possibly offer the shareholders offtake from the mines of the combined entity as an inducement and Citi says the offer looks superior in dollar terms to Peabody's (BTU) A$3.56 billion offer but is inferior in terms of structure for the three top shareholders. Says Xstrata (XTA.LN)
Citic could be potential rival bidders for Macarthur and that a realistic range for successful offers would be between A$16 and A$20 per share.
With M&A in the coal sector gathering pace, Citi says Whitehaven (WHC.AU) is the next most likely target. MCC last up 8.6% at A$15.60. ([email protected])
MCC Price at posting:
$15.83 Sentiment: Buy Disclosure: Held
