Mining firm Gujarat NRE Coke, which has made a takeover bid to acquire Australia’s Rey Resources, will not hike its offer if Australian firm’s share prices continue to rally, Arun Jagatramka, chairman and managing director, said.
“Prices have run up after our takeover bid... if it moves up further we will not increase our bid. If we start bidding higher, we’ll be bidding against ourselves,” Jagatramka said.
Rey’s shares have jumped over 250% since the takeover offer first came in June from Gujarat NRE Minerals, the Australian unit of Gujarat NRE Coke. Rey Resources owns coal, oil and gas tenements in west Australia. The offer is valid up to September 4.
Gujarat NRE is eyeing growth from Rey’s 500 mt of coal resources, which needs to explored, Jagatramka said, adding they have not earmarked any investments yet. Also, the firm is open to more acquisitions in Australia if valuations come cheap but is not in talks with anyone, he said.
The miner has been receiving export enquiries from Europe and South America over the past three weeks, after 6-8 months of low demand in key recession-hit economies of the world.
However, the firm is riding on local demand with its key customers — steel producers — raising capacities. India’s steel demand is expected to show annual growth of 10% soon as the outlook for the sector brightens, steel secretary P R Rastogi has said.
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