Jindal cuts stake in Australia’s RCI despite bidding war with Meijin
08 Jan 2010
In the midst of a bidding war with China's Meijin Energy Group for acquiring Australian coking coal developer Rocklands Richfield (RCI), Jindal Steel and Power (JSPL) made a surprise sale of 2.77 per cent from its 16.37 per cent in RCI, sending its share prices down 16 per cent to 37.5 Australian cents.
On 2 January, JSPL sold 2.1 million shares of Perth-based RCI, reducing its holding to 13.6 per cent, down from 16.37 per cent.
The Australian Securities Exchange was notified of the sale through a regulatory filing on 5 January. Interestingly, on the same day, the Delhi-based company; part of the $8-billion Jindal group matched a revised sweetened 29 December takeover offer from China's Meijin Energy Group of A$0.56 cents a share, which valued RCI at A$197.2 million. (See: Jindal again matches Meijin's takeover offer for Australia's Rocklands)
The unexpected share sale surprised the top management of RCI, which is in the process of organising a meeting with Jindal's top management in New Delhi after JSPL matched Meijin's offer. RCi says it is seeking clarifications from JSPL on the sudden sale of 2.1 million shares.
In view of Chinese state owned companies making large acquisitions in the Australian mining and energy sector, the Australian regulator had said late last year that state owned enterprises should restrict their investments in Australian resource firms to 15 per cent.
It is being speculated that the Australian regulator may have also asked JSPL to reduce its stake in RCI to below 15 per cent, although JSPL is a private company without any state stake ownership.
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