UPDATE: Peabody Says A$15/Share Bid For Macarthur Coal Offers Compelling Value

U.S. coal producer Peabody Energy Corp. (BTU) said Tuesday its reduced takeover offer for Australia's Macarthur Coal Ltd. (MCC.AU) represented "compelling value" for the target company's shareholders.

"Our offer price is based on all information that is available to Peabody, after completion of our due diligence and taking account of the proposed resource profit tax," Peabody Energy spokeswoman Jennifer Morgans said in a statement. "We believe A$15 cash (a share) represents excellent and compelling value for Macarthur shares."

The U.S. company had earlier proposed A$16 a share, but lowered its bid after completing due diligence May 3 and considering the impact of the government's proposed 40% Resource Super Profits Tax. The latest lower bid values Macarthur around A$3.8 billion.

The resources tax is expected to hit coal miners such as Macarthur particularly hard.

Macquarie analysts estimate that it could lower earnings by 15%-19% from 2013-2015.

Peabody's earlier bid had a lukewarm reception from Macarthur's major shareholders and Macarthur Chairman Keith De Lacy said Tuesday he was "not inclined" to accept the reduced bid.

"We are not inclined to take a discount in price based on a tax that may never be introduced," he said in a statement.

Peabody's revised offer was a swift turn of events from just a few weeks ago, when it lifted its bid for Macarthur twice to compete with New Hope Corp. (NHC.AU), which was also bidding for the coal producer.

Anglo-Swiss miner Xstrata PLC (XTA.LN) also approached Macarthur's major shareholders and appointed advisors for a potential bid, according to Macarthur, but an offer never emerged from Xstrata.

The U.S. coal company remains willing to offer Macarthur's three major shareholders, Citic Resources Holdings (1205.HK), ArcelorMittal (MT) and Posco (005490.SE) the opportunity to retain their economic interest in Macarthur.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail];

(Ross Kelly in Sydney contributed to this article)