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December 9, 2005
Via Facsimile ((412) 355-6501) and U.S. Mail
Ronald D. West, Esq.
Kirkpatrick & Lockhart Nicholson Graham LLP
535 Smithfield Street
Pittsburgh, PA 15222-2312
Re: Arch Coal, Inc.
Schedule TO-I
Filed December 1, 2005, amended December 5, 2005
File No. 005-51233
Dear Mr. West:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Schedule TO-I
Item 4. Terms of the Transaction
1. With respect to your disclosure in subsection (b), please tell
us
why you need to qualify your disclosure "to the best of [your]
knowledge." What prevents you from knowing and disclosing this
information? Please explain or delete the qualifier. Please also
apply this comment to the disclosure in Item 8(a) of this Schedule
and to the section "Interest of Directors and Officers" on page 57
of
the Offering Circular.
Item 10. Financial Statements
2. We note your incorporation by reference of disclosure in a
section
entitled "Ratios of Earnings to Combined Fixed Charges and
Preference
Dividends" but that section does not appear to be included in your
Offering Circular. Please revise or advise.
3. Please tell us your basis for not including the pro forma
financial statements required by Item 1010(b) of Regulation M-A.
Exhibit (a)(5)
4. You stated in this press release that the discussion therein
contains forward-looking statements within the meaning of the
Private
Securities Litigation Reform Act of 1995. Note that the safe
harbor
protections for forward-looking statements contained in the
federal
securities laws do not apply to statements made in connection with
a
tender offer. See Section 21E(b)(2)(C) of the Securities Exchange
Act of 1934 and Regulation M-A telephone interpretation M.2
available
at www.sec.gov in the July 2001 Supplement to the Division of
Corporation Finance`s Manual of Publicly Available Telephone
Interpretations. Please confirm that you will avoid making
reference
to that Act in all future communications in connection with the
tender offer.
Offering Circular
5. We note that the averaging period extends five trading days.
Please advise as to why you believe that the formula pricing
mechanism is consistent with the requirements of Rules 13e-
4(d)(1),
13e-4(f)(1)(ii) and 14e-1(b). In this regard, we note that we have
granted relief from these provisions in connection with 10 day
averaging periods. See TXU Corporation (Sept. 13, 2004) and
Lazard
(Aug. 11, 1995).
6. Please confirm that at least two trading days will remain in
the
offer after the averaging period.
7. Item 1001 of Regulation M-A requires a summary term sheet that
briefly describes the most material terms of the transaction in
bullet point format. The term sheet should begin on the first or
second page of the disclosure document. See Instruction 2 to Item
1001 of Regulation M-A. Confirm that in the future you will
comply
with this requirement.
The Conversion Offer, page 5
8. Revise to include a toll-free number security holders may call
through the entire period of the offer to determine the total
amount
of shares of common stock to be received as premium in the offer
per
share of preferred stock tendered. Please be certain to highlight
this information.
Questions and Answers about the Conversion Offer, page 9
9. Refer to the disclosure under the question "What are the
conditions to the conversion offer?" Instead of including a
cross-
reference to another location in the offering document, describe
briefly the conditions to the offer in this summary. Refer to
Item
1001 of Regulation M-A. Also, apply this comment to the question
"What are the material federal income tax consequences...?"
Selected Consolidated Financial and Operating Data, page 26
10. We note you have incorporated by reference the financial
information required by Item 1010(a) of Regulation M-A and have
provided the summary information required by Item 1010(c). Please
provide the information required by Item 1010(c)(2), (4) and (5)
of
Regulation M-A.
The Conversion Offer
Terms of the Conversion offer, page 28
11. The last sentence of the carry-over paragraph from page 28 to
29
indicates that the company may terminate the offer at any time for
any reason. The right to terminate the offer for any reason would
render the offer illusory. Please revise to eliminate this right
or
clarify.
Acceptance; Conversion of Shares of Preferred Stock, page 33
12. We note that in the first paragraph of this section you state
that you will issue common stock pursuant to the conversion offer
"promptly" after the expiration date of the offer. We note in the
second paragraph of this section, however, that you state you will
make such issuance "as soon as practicable" after the expiration
of
the offer. Please refer to Rule 13e-4(f)(5) and reconcile your
disclosure.
Subsequent Repurchases of Shares of Preferred Stock, page 35
13. Please revise to clarify that you will comply with Rule 13e-
4(f)(6) if you effect the repurchases referred to in this section.
Where You can Find More Information, page 58
14. We note that you attempt to incorporate by reference into the
Offering Circular all filings under Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act filed while your offer is pending.
However, Schedule TO does not expressly authorize such "forward
incorporation by reference." Rather, General Instruction F
specifies
how you may incorporate by reference in a Schedule TO.
Schedule TO-I/A
15. We note you changed the formula for calculating the number of
shares to be paid as the premium upon conversion of the preferred
stock. With a view toward revised disclosure, tell us how
security
holders will be able to determine the number of shares of common
stock to be received as the conversion premium prior to the
expiration of the offer. Refer to Items 1004(a)(1)(ii) and
1011(b)
of Regulation M-A.
Closing Comments
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please direct any questions to me at (202) 551-3619. You
may
also contact me via facsimile at (202) 772-9203. Please send all
correspondence to us at the following ZIP code: 20549-3628.
Sincerely,
Daniel F. Duchovny
Attorney-Advisor
Office of Mergers and Acquisitions
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Ronald D. West, Esq.
Kirkpatrick & Lockhart Nicholson Graham LLP
December 9, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-3628
DIVISION OF
CORPORATION FINANCE