Jindal Steel and Power's (JSPL's) bid to acquire a majority stake in Gujarat NRE Coke's Australian subsidiary has not been successful, with the company managing to acquire only 31.49% stake at the end of its open offer.
On January 31, JSPL had launched an open offer for fully acquiring Gujarat NRE Coking Coal Ltd, the Australian subsidiary of Kolkata-based Gujarat NRE Coke, by putting a all cash bid of AUD 0.20 per share.
A JSPL filing to the Australian Securities Exchange (ASX) showed that the Naveen Jindal-led steel maker managed to acquire only 31.49% at the close of the offer on Thursday against the outright purchase target of the company.
The offer was launched on February 15.
The steel maker had earlier extended the closing date of offer till March 28 and had said it will not be increased further.
A top JSPL official said: "Response of the open offer is very much on the expected lines. Our target was to acquire as many shares as we can out of the total public float and you can see that we have succeeded in that."
Gujarat NRE Coking Coal's promoters hold 64.1% stake in the company. Together with JSPL's stake of 31.49% in the company, Gujarat NRE Coking Coal's publicly traded shares have got reduced to less than 5% on the ASX.
The board of Gujarat NRE Coking Coal had rejected JSPL's bid immediately after the announcement and had advised company shareholders to reject it as well.
The company Board had said that JSPL offer does not adequately reflect future prospects of Gujarat NRE Coking Coal and its majority shareholders and promoters intend to reject the offer.
"Your directors unanimously recommend that you reject the Jindal offer," Gujarat NRE Coking Coal executive chairman and promoter Arun Kumar Jagatramka had told shareholders while recommending rejecting the JSPL offer.
JSPL, prior to launching the bid, was a minority shareholder of Gujarat NRE Coking Coal with a 19.48% stake. The steel maker also has a long-term coking coal supply agreement with the company.
Gujarat NRE Coking Coal has two producing coking coal mines in Australia, which are estimated to have reserves of 125 million tonnes (MT) and resources of 651 MT. The company has plans to increase its production to 5 million tonnes per annum in the near future.
Since the announcement of JSPL's bid, Gujarat NRE Coking Coal's shares have been trading in and around the bid price of AUD 0.20 per share on the ASX. On Thursday (the last working day of the week), company shares had closed at AUD 0.20 apiece.