Source: Financial Times, 11th July 2011

"I came through and I shall return." US general Douglas MacArthur's words following his escape to Australia from the Philippines in the second world war could easily have come from Monday's bidders for the Brisbane-based coal producer named after him. Last year Peabody Energy 's A$16 a share bid was enough to bring Macarthur Coal to the table. But a proposed mining tax (since watered down) prompted the US company to cut its offer, killing the talks. Now Peabody has returned with a A$15.50 a share offer (worth A$4.7bn) in tandem with steelmaker ArcelorMittal, which has a 14 per cent stake in Macarthur. Given Asian steelmakers' insatiable demand for coal, the industrial logic for Peabody's return is compelling enough. But what are its chances of success?