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Gujarat NRE Coking Coal rejects JSPL's RS 1,200 cr takeover bid

The offer is at a premium of 5% over the closing share price of Gujarat NRE shares on Jan 29

Press Trust of India  |  Melbourne/New Delhi 

Promoters of do not intend to accept the all-cash AUD 221.61 million (Rs 1,200 crore) takeover bid from Jindal Steel and Power.

The company today also asked shareholders to take "no action" until they have received and considered "the Target's (Gujarat NRE Coking Coal) statement", which will be released by February 14.

Jindal Steel and Power (JSPL), which has 19.48% stake in Gujarat NRE Coking Coal, yesterday made an all-cash AUD 221.61 million offer to buy out the Australian subsidiary of Kolkata-based Gujarat NRE Coke.

"The company has been advised that the Gujarat NRE group companies, being the major shareholders holding approximately 64% of the issued capital in the company, do not intend to accept the offer," said in a filing to the (ASX).


further said that "Board of Directors of the company will continue to keep shareholders informed of developments as they occur."

has made an unconditional offer to acquire remaining stake of the company at Australian dollar (AUD) 0.20 per share via on-market bid. The offer is at a premium of 5% over the closing share price of shares on January 29.    

The offer, made through company's Australian arm, Jindal Steel and Power (Australia) Pty Ltd, is slated to commence on February 15 and will remain open until March 15.

Shares of have shot up over 18% on the ASX since the announcement of the takeover bid. Today, the company shares rose by 9.76% to close at AUD 0.225 (22.50 cents).

shares fell for the second day on the BSE and closed down 1.15% at Rs 415.50 apiece.

is a subsidiary of Kolkata-based Gujarat NRE Coke, the largest Indian manufacturer of metallurgical coke. The company has two producing coking coal mines in Australia, which are estimated to have reserves of 125 million tonnes (MT) and resources of 651 MT.

Besides being a minority shareholder, also has a coking coal supply agreement with

"The AUD 0.20 cash offer allows Gujarat NRE Coking Coal's shareholders to realise full and fair value of their shares in a volatile equity market. The offer represents an attractive premium of 5% on the closing share price of AUD 0.19 on January 29," Vice-Chairman Vikrant Gujral had said in a letter to the shareholders.

Jindal Steel will have to shell out a maximum of AUD 221,613,715, if it receives 100% acceptance.

The bid, if successful, would help in securing coking coal supplies to a big extent for its projects in India as it wants to have a 20 MT per annum steel making capacity by 2020.

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