Anglo American-Peabody Coal Business Deal Under Scrutiny Due to Financing Woes -- Market Talk
0854 GMT - There are concerns over how Peabody can afford to refinance its bridge loan for the acquisition of Anglo American's steelmaking coal business, RBC Capital Markets analysts write. Peabody shares have plummeted since the acquisition was announced and it has said it is reviewing the up to $3.78 billion deal. However, the agreement contained no break clause so it is unclear how Peabody could exit it, the analysts write. Anglo American might have to support Peabody by reducing the upfront capital needed to complete the acquisition, they write. Options include changing the payment structure, underwriting Peabody's debt or taking equity in the company. These aren't ideal but are better than restarting the sales process, they add. Anglo American shares trade down 1.21% at 2,073.50 pence.
