New Hope Corporation Limited (NHC) today announced its intention to acquire 100% of Macarthur Coal Limited (MCC) offering 2.7 New Hope shares for every 1 Macarthur share by way of a scheme of arrangement valuing Macarthur at $14.581 per share and representing a total consideration of $3.71 billion.
The Offer provides Macarthur shareholders with an opportunity to continue to be a shareholder in a major Australian coal company with an increased reserve and resource base, enhanced scale and diversified geographical, product and infrastructure assets; to become shareholders in a combined entity with a market capitalisation of over $8 billion and a net cash position greater than $1.5 billion; to benefit from increased market presence and liquidity of shares; to share in the significant synergies created by merging Macarthur with New Hope. This is the estimated market capitalisation of Macarthur based on Macarthur shares currently on issue at the Offer price. New Hope believes the Offer is superior to both the Gloucester transaction and the highly conditional, non-binding, indicative proposal put forward by Peabody Energy Corporation. The Board of New Hope believes that a merger of the two companies is in the best interests of both New Hope and Macarthur shareholders and is a superior proposal to the Gloucester transaction.
A merged New Hope and Macarthur Coal will create a leading Australian Securities Exchange listed player in the Australian coal sector with an implied market capitalisation greater than $8 billion. The entity will have a substantial resource and reserve base with a significant development pipeline. It will also have cash resources of greater than $1.5 billion to develop this pipeline. The merged entity will have the infrastructure in place to underpin this production growth. The merged entity will have a diverse range of geographical locations, mines, infrastructure and products with five operating coal mines shipping through two coal terminals.
New Hope Corporation Limited (NHC) is an independent Australian energy company with a current market capitalisation in excess of $4 billion. New Hope has more than 500 employees and over 7,000 shareholders. It has a proven track record in generating superior shareholder returns as evidenced by the average annual rate of total shareholder return over the past three years being over 50%. Production tonnage has increased over the past three years by 23% to 5.5Mtpa.