Notable Mergers and Acquisitions of the Day 03/31: BTU, BHI/BJS, NGLS
- Peabody Energy Corp. (NYSE: BTU) said on Wednesday that it has made a bid $3 billion takeover bid for Australia-based Macarthur Coal Ltd. however the offer was rejected by the Australian energy company after saying it undervalued the its worth.
The bid was a conditional nonbinding offer from Peabody that offered 13 Australian dollars per share, totaling the value of Macarthur at AU$3.3 billion ($3 billion).
Shares of Macarthur are up 16 percent on the Australian stock market Wednesday, as investors see a strong possibility that Peabody will sweeten its offer.
According to Peabody, the Australian company has 145 million tons of reserve of low-volatile PCI coal, and 1.3 billion tons of resources, with a current production capacity of 5 million tons per year.
Peabody stated that there is a "strong strategic rationale for a combination of Macarthur's operating assets and project pipeline with Peabody’s growing Australian platform of metallurgical and thermal coal production."
To make the bid work, Peabody must garner support from Macarthur's three largest shareholders, including China's Citic Resources, and steelmakers ArcelorMittal (NSYE: MT) and POSCO (NYSE: PKX), who as a group own 47.3 percent of the Australian company.
Peabody plans to open discussions with the major shareholders of its takeover target, while also being ready to talk with the board of Macarthur to discuss the matter.
Shares of Peabody are down 77 cents in premarket trade on Wednesday to $44.90.
- Baker Hughes Incorporated (NYSE: BHI) and BJ Services Company (NYSE: BJS) have reached a general understanding with the Antitrust Division of the U.S. Department of Justice regarding divestitures that will be required as a condition to governmental approval of the pending merger between the companies.
Pursuant to the understanding, Baker Hughes will be required after the closing to divest two stimulation vessels (the HR Hughes and Blue Ray) and certain other assets used to perform sand control services in the U.S. Gulf of Mexico. The Antitrust Division of the U.S. Department of Justice, Baker Hughes and BJ Services are finalizing a proposed Final Judgment. The Final Judgment must be approved by the Federal District Court in Washington, D.C. before the closing can occur. The parties do not expect that the divestiture will be material to the business or financial performance of the combined company following the merger.
The special meetings of each of the Baker Hughes' and BJ Services' stockholders will be reconvened on March 31, 2010, at 9:00 a.m. Central Daylight Time, to vote on the merger and related matters as previously announced. Baker Hughes and BJ Services expect to close the merger as soon as practicable in early April following the expected approval by their stockholders at such meetings and the Federal District Court in Washington, D.C., subject to the other closing conditions.
- Targa Resources Partners LP (NYSE: NGLS) announced today that it has agreed to acquire from Targa Resources, Inc. certain natural gas gathering and processing businesses located in West Texas and Louisiana known as Targa's West Texas Assets and certain of its Coastal Straddle Plants. Total value of the transaction is approximately $420 million, subject to certain adjustments. Consideration paid to Targa will consist entirely of cash funded through borrowings under the Partnership's senior secured revolving credit facility.
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