Ken Talbot, the mining engineer who turned tiny coal company Macarthur Coal into a $3 billion powerhouse, is selling up.
Macarthur Coal shares have soared 14% this morning on the news of Talbot’s decision. The company’s shares are up more than 50% since the start of the year, thanks in no small part to news in recent weeks that Asian steelmakers had agreed to increase contract coal prices by up to 200%. Talbot owns 27.2 % of Macarthur Coal, worth around $670 million.
The Australian Financial Review reports Talbot has held talks with at least four potential buyers of the stake, including Swiss resources giant Xstrata. Macarthur Coal confirmed this morning it has received an approach from a third party, but says there are no guarantees the talks will result in a formal takeover offer.
A spokesman for Talbot, who is currently overseas, said the coal baron had no comment, but described the situation as “fluid”.
The purchase of Talbot’s stake will trigger a takeover of Macarthur – under the Corporations Act, any company that buys more than 20% of a company must make an offer for the entire company. Macarthur is likely to fetch offers well above $3 billion.
Talbot has gradually stepped back from his involvement in Macarthur’s management since being charged on 35 counts of corruption over a series of loans made to former Queensland government minister Gordon Nuttall.
He stepped down temporarily as managing director after being charged by the Queensland Crime and Misconduct Commission in late 2006 and then formerly appointed Nicole Hollows to the top job in June last year. He remains a non-executive director of the company.
Talbot’s is one of the great worker-to-owner wealth stories.
After 30 years as a mining executive, he founded Macarthur Coal in 1996 and listed it in 2001, with the shares hitting the boards at $1.39. During his time at the helm of the company, Talbot started four mines, helped revolutionise the coal market (Talbot’s tireless promotion of Macarthur’s key product, pulverized coal injection (PCI) coal, was a key factor in its increased use by Asian steel makers) and produced big returns for shareholders who have seen Macarthur shares soar above $15 this morning.