ArcelorMittal buys Macarthur Coal stake

By Fayen Wong

PERTH (Reuters) - ArcelorMittal (ISPA.AS), the world's top steel maker, is in talks with Australia's Macarthur Coal after buying a 15 percent stake in the company, setting up a possible bidding war for the A$4.4 billion (2.1 billion pound) group and pushing its shares up 14 percent.

Soaring coal prices, driven by demand from fast-industrialising China and India and tight supplies, have put Australia's mining sector in play amid a global resources grab.

Arcelor paid about A$630 million for the 14.9 percent stake it bought on the market, or about A$20 per share, a 9 percent premium to Macarthur's closing price on Tuesday.

"ArcelorMittal is a very large coal consumer and is looking to vertically integrate. There is a lot of motivation for them to launch a full takeover for Macarthur," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand (ANZ) Bank.

"With reports of CITIC and Xstrata also circling the company, that will put a lot of pricing tension on the stock since this could potentially lead to a bidding war."

Macarthur said Arcelor had approached it about a transaction. It did not give further details, but said it was already in talks with another unidentified group.

Shares in Macarthur, which have jumped nearly 62 percent since April 18 after it said it was in takeover talks with an unnamed group, were up 14 percent at A$20.91 by 2:16 a.m. British time.

Shares of other potential Australian mining targets Centennial Coal (CEY.AX) and Felix Resources (FLX.AX) also gained.