In morning trading on the New York Stock Exchange, shares of Peabody, which operates mines in Australia and is trying to acquire more to meet growing Asian demand for steel-making coal, were down $2.34, or 5 percent, at $44.38.
Earlier, shares of Macarthur Coal (MCC.AX) fell 10 percent to A$13.86 in Australia as investors bet Peabody would scrap its $3.8 billion offer for Macarthur after the Canberra government proposed the new tax on miners.
"That's my guess," analyst William Burns of Johnson Rice & Co said when asked if the mining tax was moving Peabody's stock. "The government is talking about taxing companies that are making big profits."
Jeremy Sussman, an analyst with Brean Murray Carret & Co, said, "Peabody is underperforming because of the (Australian) mining tax, and some people are unsure how to view it."
Burns also noted that Monday was the last day Peabody had access to the books at Macarthur before deciding whether to go ahead with its offer. Peabody has increased its offer to A$16 per share, making the deal worth A$4.1 billion.
Other U.S. coal stocks were also down Monday morning. Alpha Natural Resources fell 3.4 percent to $45.45, Arch Coal slipped 2 percent to $26.46, and Consol Energy dropped 3.3 percent to $43.19. But Massey Energy went against the trend, rising 2.1 percent to $37.40.
(Reporting by Steve James; editing by John Wallace)
Sourced from www.reuters.com
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