Jindal Steel and Power (JSPL) has raised its bid for Australian coal miner Rocklands Richfield to match a counteroffer by a Chinese firm, only to be rebuffed by the Aussie firm.
Rocklands said the AUS $0.52 a share offer by China’s Meijin Energy was still “superior” than the revised bid made by Naveen Jindal’s JSPL.
The Australian firm has asked the Indian company to place a better bid. Jindal Steel had earlier offered AUS $0.42 a share and signed a term sheet with the Rocklands management on September 22.
After Meijin threw its hat in the bid ring, JSPL revised the offer to AUS $0.50, valuing the company at AUS $194.98 million, or around Rs 841 crore.
The latest Jindal offer is the same as the Ruias-owned Essar Group’s offer in October. Essar entered the fray in October 7 but dropped out of the race on October 20. Meijin Energy joined the bid battle on November 2 at a time when Jindal Steel was carrying out due diligence on Rocklands.
In the revised offer, JSPL wanted Rocklands to reject the Meijin offer, proposed infusion of new equity and sought board representation, all of which had been rejected by the Australian company.
Rocklands said the Chinese were giving a better deal, mainly because of the higher price.
JSPL, which has a steel mill and a power plant in Chhattisgarh and is expanding in Orissa, already owns 14.16 per cent in Rocklands.
The company is looking for coking coal abroad since there is an acute shortfall of the crucial raw material, used in steel making, in India.
Australia, South Africa and Indonesia are the three most sought-after destinations for steel companies seeking to own coking coal. China, which has large deposits of coking coal, rations export, thereby dictating the price.
The Rocklands acquisition will give JSPL entry into the Chinese coking coal market, which foreign companies find difficult to access.
The Aussie company has two metallurgical coke plants in China following its acquisition of China Coke and Chemicals in October 2007. These units make met coke from local coal.
Source: Calcutta Telegraph
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