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Peabody Energy and ArcelorMittal SA Submit Proposal to Acquire Macarthur Coal

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AsiaNet 45447

ST. LOUIS, July 11, 2011 /PRNewswire-AsiaNet/ –

Peabody Energy (NYSE: BTU) and ArcelorMittal SA (NYSE: MT) todayconfirmed that they have jointly submitted an indicative proposal to theboard of directors of Macarthur Coal Ltd. (ASX: MCC) to acquire all of theshares of the company.

Under the proposal by a newly formed company, owned 60 percent byPeabody and 40 percent by ArcelorMittal, Macarthur shareholders would beoffered a cash price of A$15.50 per share through an off-market takeoveroffer. The new company has a relevant interest of approximately 16 percentin Macarthur’s shares.

The proposal price implies a value for the equity in Macarthur ofapproximately A$4.7 billion and represents a substantial premium to recenttrading.

The proposal to Macarthur’s board is non-binding and conditional on thesuccessful completion of due diligence, which would be completed in a timelymanner. Any resulting offer to Macarthur shareholders would be subject onlyto minimum 50.01 percent acceptance, Australia’s Foreign Investment ReviewBoard approval and other customary conditions and approvals.

According to Peabody Chairman and Chief Executive Officer Greg Boyce,”We believe there is significant value that can be created by managingMacarthur’s portfolio of coal assets using Peabody’s industry-leadingoperating, development and commercial skills. We look forward to advancingthis proposal to complete a transaction for the benefit of Macarthurshareholders.”

Aditya Mittal, Chief Financial Officer and Member of the GroupManagement Board of ArcelorMittal, said: “ArcelorMittal has been a long-terminvestor in Macarthur, and we look forward to discussing our proposal withthe board of Macarthur.”

Macarthur is the world’s largest producer of seaborne low volatilepulverized coal injection (LV PCI) coal with production and developmentassets in the Bowen Basin, Australia, including the Coppabella and MoorvaleJoint Venture and Middlemount Mine. It controls total coal reserves ofapproximately 270 million tonnes (approximately 175 million tonnes on anattributable basis) and total resources of approximately 2.3 billion tones(approximately 1.7 billion tonnes on an attributable basis). It has currentproduction guidance of 3.8 to 4.0 million tonnes for the year ended June 30,2011.

Peabody is the world’s largest private-sector coal company and a globalleader in clean coal solutions. With 2010 sales of 246 million tons andnearly US$7 billion in revenues, Peabody fuels 10 percent of U.S. power and2 percent of worldwide electricity.

ArcelorMittal is the world’s leading integrated steel and miningcompany, with operations in more than 60 countries. In 2010, ArcelorMittalhad revenues of US$78 billion and crude steel production of 90.6 milliontonnes, representing approximately 8 percent of world steel output.ArcelorMittal’s mining operations produced 47 million tonnes of iron ore and7 million tonnes of metallurgical coal as well in 2010.

Peabody has engaged UBS and Bank of America Merrill Lynch as itsfinancial advisers and Freehills as its legal adviser in relation to thepotential transaction. ArcelorMittal has engaged RBC Capital Markets as itsfinancial adviser and Mallesons Stephen Jaques as its legal adviser inrelation to the potential transaction.

Certain statements in this press release are forward-looking as definedin the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements are based on numerous assumptions that Peabodybelieves are reasonable, but they are open to a wide range of uncertaintiesand business risks that may cause actual results to differ materially fromexpectations. These factors are difficult to accurately predict and may bebeyond the company’s control. The company does not undertake to update itsforward-looking statements. Factors that could affect results include thosedescribed in this press release as well as risks detailed in the company’sreports filed with the Securities and Exchange Commission.

Nothing in this announcement constitutes or is intended to constitute aproposal to make a takeover bid for Macarthur Coal Limited. There is noassurance that any such takeover bid will be made.

Macarthur reserves and resources and other information are based onpublic disclosures and exclude the MDL162 tenement.

Vic Svec


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