Anglo American bids for Sesa Goa stake

Anglo American, the world's second largest mining and natural resources company, today submitted its bid with five others for the Japanese firm Mitsui & Co's 51 per cent stake in India's largest mining firm Sesa Goa.

A source close to the development said in addition to Anglo American, which enjoyed partnership with Mitsui & Co in Australia, other bidders included the world's largest steel company Arcelor Mittal, Brazil's mining firms Rio Tito and CVRD, the Anil Agarwal-controlled Vedanta Resources and the Aditya Birla group's privately held company Essel Mining & Industries.

They added that Mitsui's investment banker would now handpick three highest bidders from the lot and invite them to examine the plants. The bidders were expected to put in their final bids in another fortnight, they added. Mitsui's advisor is Morgan Stanley.

According to bankers, Anglo American might emerge as a frontrunner. Recently, the coal joint venture between Anglo American and Mitsui in Australia had acquired exploration rights in the Surat area of Queensland.

Mitsui and Anglo American are expanding exploration to boost reserves to supply thermal plants and steelmakers in Asia with coal.

According to Indian laws, winner of Mitsui's 51 per cent stake will have to come out with a mandatory 20 per cent offer for minority shareholders of Sesa Goa.

At today's market rate of Rs 1900, the company with 150 million tonne of iron ore reserves is valued at Rs 7450 crore. It means the acquirer will have to chip in Rs 5290 crore.

The Sesa Goa stock has soared by as much as 22 per cent since the beginning of January when news broke out that Mitsui had put its stake on the block. The stock reached its 52-week high of Rs 2,000 on January 29.