MACARTHUR Coal has scrapped its plan to buy Donaldson Coal from Noble Group, after failing to reach a binding agreement with the Hong Kong trading house.
Macarthur yesterday said it had reached a deal with Noble to buy Gloucester Coal, a Hunter Valley producer, after announcing the plan last month. It will also buy Noble's 25 per cent share in the Middlemount joint venture, a coking coal project in Queensland, of which Macarthur now controls 70 per cent.
But the parties have ditched the most contentious aspect of the $1.2 billion group of transactions between Noble and Macarthur - the purchase of the Donaldson Coal business.
''We have agreed with Noble not to proceed with the elements of the transaction which relate to Donaldson,'' Macarthur's managing director, Nicole Hollows, said.
The parties did not say why they had ditched the transaction, but the proposal had been criticised because Donaldson's unlisted status meant investors knew less about the business.
Donaldson, of which Macarthur was planning to buy 79 per cent, was also unpopular with some shareholders because of its mines' age and the fact they are underground, not open cut.
Analysts have also criticised Macarthur's plans to pay Gloucester shareholders 0.84 Macarthur shares each, as this will give Noble a stake of nearly 25 per cent in the company.
Macarthur shares slumped almost 8 per cent to $9.45, and Gloucester shares fell 3 per cent to $8.25.
