The battle for Africa-focused coal miner Riversdale seems to be hotting up with Tata Steel — the largest shareholder with a 24% stake in the Aussie firm — and International Coal Ventures Ltd (ICVL) evincing interest in a counter bid.
Anglo-Australian miner Rio Tinto offered $3.9 billion on Thursday to buy Riversdale.
The Tata Group firm on Friday said it was looking at various options, including bidding solo for Riversdale. “Tata Steel will evaluate the takeover bid in the context of other alternatives available to Tata Steel,” the company said in a regulatory filing.
“There are many alternatives available with Tata Steel but at this point the company will not like to discuss it. It is studying the bid,” said Sanjay Choudhary, spokersperson, Tata Steel.
Meanwhile, ICVL was awaiting a recommendation from its adviser Citigroup on whether to bid for Riversdale, Coal India chairman Partha Bhattacharyya said on Friday. The consortium has the financial strength to fund the rival bid, he said.
“All the companies in ICVL are strong financially. Funding will not be a problem,” Bhattacharyya said, adding, that ICVL was not in formal talks with Tata Steel for an allaince.
“Everyone is talking to everyone,” a source familiar with the matter said, when asked whether ICVL and Tata Steel were in talks to form an alliance.
Talks included the possibility of a joint bid for Riversdale or support from Tata Steel for an ICVL bid, he said.
ICVL consists of National Thermal Power Corporation, Steel Authority of India Ltd, National Mineral Development Corporation, Coal India and Rashtriya Ispat Nigam Ltd.
Citigroup will submit a report in two weeks and a decision on whether to bid within a month. “Citi's mandate is to tell us whether we should consider a bid higher than $3.9 billion.”
The four listed state firms in the consortium held a combined cash reserves of around Rs 44,000 crore as of the end of September.
PTI & Reuters