Essar pulls out of contest with Jindal for Rocklands

Mumbai-based Essar Group withdrew from a bidding contest with Jindal Steel & Power Ltd for Australian coal explorer Rocklands Richfield Ltd.

Rocklands has written to Essar asking why it was dropping the A$144 million ($134 million) bid, and to determine whether the group might wish to continue the takeover on amended terms, the Sydney-based company said in a statement today. Its shares declined the most in eight weeks.

Rocklands, which controls three metallurgical coal projects in Queensland, has surged six-fold in Sydney trading in the last six months, giving the company a market value of about A$107 million. The Jindal offer of 42 Australian cents a share remains “on track”, with the New Delhi-based company continuing its due diligence, Rocklands said today.

Jindal’s offer is preliminary, non-binding and conditional, Rocklands said today. Jindal owns 12.75 per cent of the coal explorer, an October 9 statement to the Australian stock exchange showed.