Corrs advises on deals to increase Macarthur Coal’s holdings

03 February 2010

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Corrs is currently advising Macarthur Coal Limited (“Macarthur”) on several significant deals that will increase the company’s holdings and solidify its position as one of Australia’s top independent coal producers.

Macarthur announced in late December 2009 an intention to acquire 100% of Gloucester Coal Ltd via an off-market takeover by an all-scrip offer with cash alternative. At the same time as the Gloucester takeover announcement, Macarthur also announced that it had entered into a conditional binding term sheet to acquire Noble Group Limited’s interest in the Middlemount joint venture, taking Macarthur’s ownership to 100% of Middlemount including all marketing rights for Middlemount product. The company also announced that it was continuing discussions with Noble to acquire a majority stake in Donaldson Coal Holdings Ltd. Finally, Macarthur announced that it had entered into a conditional binding term sheet to acquire the 7% interest held by Macarthur’s largest shareholder, CITIC Resources, in Macarthur’s Coppabella and Moorvale joint venture.

Macarthur has since announced that it has now entered into definitive legal documentation with Noble in relation to the Middlemount transaction and that the Donaldson transaction is not proceeding. The Middlemount transaction will remain conditional upon FIRB approval, the Gloucester offer becoming unconditional and Noble accepting the Gloucester offer.

To date, Corrs has advised on the structure and terms of the proposed takeover of Gloucester and the transactions with Noble and CITIC as well as conducting due diligence investigations in relation to the proposed acquisitions.

Corrs partner Teresa Handicott said: “This transaction has been significantly more logistically challenging and technically complex than most takeovers as a result of the number of separate transactions and the unusual situation that some of them are with Gloucester’s major shareholder. There are very few examples of public takeovers with separate transactions with a shareholder of the target, partly due to the legal and regulatory issues involved.”

Corrs Partners Teresa Handicott (Corporate Advisory) and John Kelly (Energy & Resources) are leading the Corrs team along with Andrew MacKenzie, Bruce Adkins, Jeremy Horwood and Franka Cheung. The firm has a long history with Macarthur Coal, and has previously advised the company on numerous transactions related to acquisitions, joint ventures and restructures.