Chinese firm Meijin leads the bidding war with $176-mn offer.
Billionaire politician Naveen Jindal-promoted Jindal Steel & Power Ltd (JSPL) plans to match the offer of a Chinese energy company for Australian coal firm Rocklands Richfield. China’s Meijin Energy Group stepped up the bidding war on Tuesday, when it raised its offer to $176 million (over Rs 820 crore) against JSPL’s offer of $138 million (Rs 645 crore).
JSPL has been invited to revise its offer price and match the Meijin offer by 7.30 pm Perth time today, Rocklands said, adding that offers from both companies are preliminary.
If JSPL raises its bid, it would be the second such revision to match the Chinese company in its bid for Rocklands. The New Delhi-based steel major, which already owns a stake of about 16.4 per cent in Rocklands, had revised its takeover proposal to 52 Australian cents a share from 50 cents in November.
“As raw material security is crucial for JSPL’s growth plans, it is highly likely to raise the offer to the level of Meijin's offer of 56 Australian cents a share,” investment banking sources said.
When contacted, an executive said the company would evaluate the counter proposal of the Chinese firm and take a decision, considering the asset value. “It is premature to say anything about increasing our offer price,” he added.
Rocklands noted that neither of the proposals was a formal offer at this stage and both were subject to due diligence and formal terms and conditions.
In October, Indian conglomerate Essar had also submitted a bid for the Australian coal miner. But the Ruias-controlled group withdrew its offer nine days after submitting the bid. The Chinese firm entered the fray after the exit of Essar.
The battle for control of Rocklands indicates India and China's need to secure raw materials for feeding their growing steel and power industries. Indian coal industry officials visited Australia in September to assess potential acquisitions as demand for fuel outstrips supply in the world's second fastest-growing major economy.
Shares in the Perth-based company rallied sharply on the revised offer, rising 36 per cent on Tuesday.
Rocklands has three metallurgical coal projects in the Australian state of Queensland with total resources estimated by it at more than 900 million tonnes. The company also operates a coking coal plant in eastern China.