Indian diversified conglomerate Aditya Birla Group has dropped plans of acquiring Australian junior miner Northern Iron Ltd, an iron ore supplier to Tata Steel Europe, after finding variability in production while conducting due diligence.
Northern Iron's other suitor, Swiss-Russian trading company, Prominvest AG, which had trumped a sweetened bid from Aditya Birla Group, has also backed out from the race for Northern Iron, which owns the Sydvaranger Iron Ore Project in northern Norway.
On 23 July, yuAditya Birla Group's Essel Mining & Industries had raised its May 2012 takeover offer for Northern Iron by about 4 per cent to A$1.40 per share or A$518 million ($532 million), two months after the Australian company rejected its $1.28 to $1.35 a share offer as being too low.
Norther Iron had rejected Essel Mining's initial offer saying that the bidder had failed to reflect the improvements in quality and production rates that it expected to achieve at its iron-ore mines in Norway.
A week after Aditya Birla Group sweetetened its offer, Swiss-Russian trading company, Prominvest AG made an A$1.42 per share or A$525 million ($550 million) counter-bid for the Perth-based company.
After both suitors dropped certain conditions to their offers, Northern Iron gave the go ahead to Aditya Birla Group and Prominvest to conduct due diligence.