BMO Capital Markets Comments on Peabody Energy

BMO Capital Markets provided color on Peabody Energy BTU in a research report published today. BMO Capital Markets has previously given Peabody Energy an Outperform rating and $77 price target. In the report, BMO Capital Markets states, "Peabody and ArcelorMittal confirmed an indicative proposal to acquire all outstanding shares of Macarthur Coal for A$15.50/share in cash (~40% premium to the last close) implying an equity value of approximately A$4.7B. The transaction values MCC at ~8.8x NTM EV/EBITDA, above the average for recent global coal transactions of 7.8x NTM EV/EBITDA. In BMO's view, the transaction would be positive for BTU as it adds growth in the Australian met coal business and would likely be funded with cash and debt (i.e., no equity dilution)." Shares of Peabody Energy were trading at $57.89 at the time of posting, down 3.44% from Friday's market close.