Macarthur Coal (MCC) Update

Macarthur Coal (MCC) has a maintained Outperform recommendation from Australian sharemarket analyst Macquarie Research Equities. Despite a volatile ride over the past month, MCC shares have gained more than 55% since March on the back of an improving coal sector. Yesterday, the company announced that CITIC Resources had increased its shareholding from 11.62% to 19.99%, paying $7.20 per share, a 6% premium to yesterday’s closing price. The analysts maintain their Outperform recommendation on MCC based on the company sustaining operational performance at Coppabella/Moorvale as well as further greenfield project development in the Bowen Basin. Talbot remains largest shareholder. CITIC Resources has acquired 15,683,735 shares in Macarthur Coal at $7.20ps for a total of ~$112.9m from Ken Talbot. This represents a 6.35% premium to Friday's closing price. Following the sale, the Talbot Group will remain the largest shareholder with a 27.2% stake (previously 35.57%). Talbot a seller. The deal confirms that Ken Talbot is a seller. While this question has raised much speculation over the last few months, it follows from the recent announcement that Ken Talbot has relinquished all executive duties on the Macarthur Coal board. Ken Talbot remains a non-executive director. Traders vying for marketing rights. The deal also strengthens the theme the analysts are currently witnessing in the Australian coal industry whereby coal trading houses are establishing large stakes in coal companies in order to avoid being 'squeezed out' from the market by 'the majors' as a consequence of the consolidation trend. Such examples over the last week include the Noble Group taking a 10% stake in Gloucestor Coal and Sojitz Corporation purchasing a 10% stake in the Moolarben project. Furthering the relationship. While already a substantial shareholder in the company, CITIC Resources also holds a 7% direct JV interest in the Coppabella Moorvale JV as well as JV interests in various coal exploration and development projects operated by Macarthur Coal. Further, it is a coal
trading house and is the 54%-owned subsidiary of CITIC Group. CITIC Group is one of China's largest state-owned companies, with assets in excess of US$100bn. They believe it is unlikely that CITIC will launch a full takeover for Macarthur Coal. That said, the analysts believe any potential suitor will now need to win two major shareholders over the line, rather than one – a more challenging feat.

Macarthur Coal Limited is listed on the Australian Stock Exchange (ASX) under stock code MCC. You can view their investor website here. MCC was listed on the ASX on 5 July, 2001. Keith De Lacy is the Chairman for Macarthur Coal and Nicole Hollows is the CEO. Macarthur Coal is involved in exploration, development and mining activities in Queensland's Bowen Basin. The company's corporate headquarters is located in Brisbane. Macarthur Coal's principal product is low volatile pulverized coal injection coal (PCI coal) for use in the production of steel. Macarthur Coal is a key supplier of low volatile PCI coal to the steel mills of Asia, Europe and the Americas, providing approximately 44 percent of the low volatile PCI coal exported from Australia. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MCC. Check your charts and good luck with your share trading!