UPDATE 3-Investors wary on prospect of Macarthur bid war

Mon Aug 22, 2011 3:59pm GMT

* Anglo among suitors studying books-sources

* Stock edges higher but investors see bidding war unlikely

By Michael Smith and Clara Ferreira-Marques

SYDNEY/LONDON, Aug 22 (Reuters) - Investors saw little immediate prospect that rivals would challenge Peabody Energy's bid for Macarthur Coal , though sources familiar with the matter said potential suitor Anglo American was studying the books.

Sources familiar with the matter said on Monday that Anglo, one of Australia's top coal producers, was among suitors looking at Macarthur's finances.

But they said it would not necessarily move forward with an offer to challenge the $5 billion bid currently on the table from long-time suitor Peabody and partner ArcelorMittal , which owns 16.1 percent of Macarthur.

The sources played down newspaper reports of a possible tie-up between Anglo and China's Citic, Macarthur's biggest shareholder, as premature, though analysts and others in the industry said that would be a good move from Anglo if it was to move forward and succeed in beating Peabody's offer.

Citic has not declared where it stands on the bid, despite market speculation it is opposed to Peabody's offer and could back a rival suitor. It has held talks with the Peabody camp, one of the sources said.

Citic has a 24.6 percent stake and was a major stumbling block in 2010, when Macarthur was the subject of a three-way bidding war that also included Peabody.   Continued...

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