Gujarat NRE Coking Coal rejects Rs1,200 crore bid from JSPL
18 February 2013
Gujarat NRE Coking Coal, the Australian subsidiary of the Kolkata-based Gujarat NRE Coke, has advised its shareholders to reject Jindal Steel and Power's (JSPL)
A$ 221.61 million (Rs1,200 crore) takeover bid, saying that the offer undervalues the company.
JSPL, which holds 19.48 per cent stake in Gujarat NRE Coking Coal and also has an off-take agreement, had on 31 January offered to buy the remaining shares at $0.20 in cash per share, a 5-per cent premium to the company's closing price on 29 January. The offer remains open till 15 March.
The directors and major shareholders of Gujarat NRE Coking Coal hold 64.1 per cent and the remaining 18.41is held by the public.
The New South Wales-based company said that the company's share price has now gone above JSPL'S offer and hence not only undervalues the company but JSPL has also not taken into account the future prospects of the company.
Since the offer had been tabled, Gujarat NRE Coking Coal's shares have been trading at around $0.25 and closed at A$0.20 on Friday.
The board of Gujarat NRE Coking Coal said that directors and major shareholders holding 64.1 per cent of the company intend to reject the offer.