Essar Steel has dropped out of the race to acquire Rocklands Richfield, leaving only Jindal Steel & Power in the fray.
The move by Ruia-owned Essar, which has interests in steel, shipping and telecom, comes less than two weeks after it joined the race for the Australian coal miner.
Rocklands today informed the Australian Securities Exchange that Essar did not wish to proceed with its AUS$0.50-a-share offer, which was made public on October 7.
Essar made the preliminary and non-binding offer even after Congress MP Navin Jindal’s JSPL signed a term sheet on September 22 with Rocklands.
JSPL had proposed to acquire a 100 per cent stake in the Australian company for AUS$0.42 a share.
In a letter to Rocklands, the Ruias did not offer any explanation on why they chose to exit abruptly.
An Essar spokesperson said: “As a group we keep looking at various opportunities but it is not our policy to comment on any specific deal.”
Once Essar’s withdrawal was made public, Rocklands’ share plunged 15.29 per cent to close at AUS$0.36.
Rocklands said Essar’s decision was based on external considerations and was not a reflection on the company.
Confidential and non-public information was not shared with the Essar management during the period its bid was valid.
Rocklands has written to Essar seeking clarifications on why it withdrew the proposal and whether it is possible for Essar to continue with the proposal. Essar will reply to the letter next week.
The Rocklands management was happy to see two Indian firms bidding for the company.
In the absence of Essar’s proposal, JSPL’s offer is now on. Rocklands said JSPL was already carrying out a due diligence exercise.
JSPL holds a 12.75 per cent stake in Rocklands. The firm shored up its holding in the Australian miner after Essar’s proposal became public.
Rocklands claims to have coal resources of 900 million tonnes. JSPL is setting up steel and power plants in the country and will require coal, especially the coking variety not abundantly available in India.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
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