Regional Coal: Macarthur Coal receives indicative, non-binding and conditional proposal from Peabody

Australia-listed world?s largest producer low volatile pulverized coal injection (LV PCI) firm Macarthur Coal Limited has received an indicative, nonbinding and conditional proposal from Peabody Energy Corporation and ArcelorMittal S.A (ArcelorMittal) under which they would, through a jointly owned bid company, make an off-market takeover bid to acquire a controlling interest in Macarthur for an indicative cash consideration of A$15.50 per share less the amount of the final dividend which Macarthur pays in relation to FY 2011 (Indicative Proposal).

The Indicative Proposal is subject to a number of conditions, including Foreign Investment Review Board (FIRB) approval, satisfactory due diligence investigations and the bid company achieving a relevant interest in at least 50.01% of Macarthur ordinary shares.

The Board makes no recommendation in relation to the Indicative Proposal but will seek to engage with Peabody and ArcelorMittal in relation to the price and terms.

Shareholders are advised that the Indicative Proposal is not a binding offer and is not capable of acceptance. Shareholders should Take No Action in relation to the Indicative Proposal or any documentation received from Peabody or ArcelorMittal until they receive further communications from the Board.

Macarthur is being advised by J.P. Morgan Australia Limited and Corrs Chambers Westgarth.

Macarthur plans to double its LV PCI coal sales to 9.2 million tonnes per annum by 2014.(*)