BHP in driver’s seat as interest in Mount Arthur Coal grows

Interest in Mount Arthur is growing Picture: AFP

Parties interested in BHP’s Mount Arthur Coal business in NSW are apparently already mulling over ideas on how best to acquire the asset, with a buyer consortium said to be forming.

It is understood a group including a Southeast Asian investor and a company that would buy coal from the mine have been making inquiries about the asset.

However, some have expressed a level of uncertainty as to the consortium’s exact level of interest in the asset saying, while a number of parties would look should the mining giant place it up for sale, only a limited number of groups would be serious acquirers.

Working on a potential sale of Mount Arthur, along with a 33 per cent interest in its long-life Colombian mine Cerrejon, is Macquarie Capital and JPMorgan.

While the $110bn resources firm has not officially fired the starting gun on a sale, the market expects it to happen and the understanding is private equity groups have not been invited to submit offers.

Likely suspects to buy the mining interests are China’s Yancoal and Anglo American.

While Glencore is also seen as a logical acquirer, the company has a production cap on thermal coal introduced this year, which may mean the Swiss group would need to offload an asset to meet investment restrictions. Glencore is a joint owner of Cerrejon with BHP and Anglo American.

Elsewhere, the Nitro Software initial public offering appears to have gained support to proceed, with adviser Morgan Stanley telling the market on Tuesday the book is covered.

It is understood the IPO has been well supported by Australian long-only investors.

The support comes after Nitro was priced at $1.80 a share for its IPO and will raise $110m. The company will be worth $264m on an enterprise value basis, equating to 4.5 times its earnings forecast for this financial year once listed. Its market value will be $327m.

Working on the deal are Bell Potter and Morgan Stanley and the company will start trading on December 11.

Nitro Software develops commercial software used to create, edit, sign and secure PDF files and digital documents.