Jindal raises Rocklands offer by 8%

Jindal Steel & Power has raised its bid for Rocklands Richfield of Australia by another 8%, matching the $0.56 per share offer of Meijin Energy for the 4.8 lakh tonne coking coal maker.

The move comes after Meijin improved its bid from $0.52 per share to $0.56 last week. Both the companies now value Rocklands at $197 million.

Jindal has been trying to acquire Rocklands since September last year when it had offered $0.42 per share.

At the current $0.56 per share, Jindal’s offer is 33% more than its initial offer. Another Indian steelmaker, Essar Steel, had joined the battle on October 7 and offered $0.50 per share, 19% more than the Jindal bid.

However, Essar soon backed out and Jindal remained the sole bidder. In November, Chinese company, Meijin Energy, entered the fray and offered $0.52 per share for Rocklands.

Jindal responded by offering $0.50 per share, 2 cents below Meijin’s offer which it later matched.

The battle doesn’t seem to nearing an end soon as Jindal is not looking to back out. It has acquired a 14.16% stake in Rocklands through open market purchases and is currently undertaking the due diligence of the Australian company.

Meantime, Rocklands, in a note to the AustralianStock Exchange, said both the offers continue to be preliminary and cannot be submitted to the shareholders for their consideration.

Apart from the 4.8 lakh tonne coking coal unit in Eastern China, Rocklands has three coalfields in Queensland’s Bowen Basin in Australia. It estimates that each of these three projects contain large deposits of metallurgical coal.

Metallurgical coal is suitable for steelmaking and hence has kindled Jindal Steel’s interest. Rocklands believes that the three projects could hold 900 million tonnes of coal resources.