Anglo mulls entry into Macarthur Coal bid battle

Anglo American is considering an entry into the race to acquire Australia's Macarthur Coal, in another sign of the deal-making frenzy sweeping through the international mining sector.

An offer, if it were to come about, would put the FTSE 100-listed Anglo in direct competition with the steelmaker Arcelor Mittal and the US coal group Peabody Energy, which have taken their joint A$4.7bn (£2.9bn) bid direct to Macarthur shareholders after failing to win the backing of the coal group's board.

Peabody and Arcelor, which is already the second largest shareholder in the group, are offering A$15.66 a share for the Australian business. They turned hostile after the Macarthur board asked for A$16 a share, along with the condition that the price would increase to A$18 if the bid received support from more than 90 per cent of shareholders.

The race to acquire Macarthur, the world's biggest producer of pulverised coking coal used in steel making, comes against the backdrop of record commodity prices. Ownership would give Anglo control of lucrative mines amid rising demand from energy-hungry emerging markets.

In addition to a possible bid from Anglo, analysts are also keeping a close eye on Citic, the Chinese group which together with its subsidiary Citic Resources owns about 24 per cent of Macarthur. Speculation about interest from the Chinese company was stoked when it emerged that its representative on the coal group's board had excused himself from discussions over the Peabody/Arcelor offer.

However, Citic's chairman, Chang Zhenming, did not give any indications when he was asked about the matter on Friday, saying: "It is not yet time to show our stance (on Peabody's offer)."