Four firms in final race for Sesa Goa

Mining firm's stock scales 52-week high of Rs 1,947.85.

Four bidders "� Brazilian miner CVRD, the world's largest steelmaker Arcelor Mittal, the Anil Agarwal-controlled Vedanta and the Aditya Birla group's privately held entity Essel Mining & Industries "� are in the last round of bidding for the country's largest mining company, Sesa Goa.

These four companies will be allowed to visit plants of Sesa Goa in the second week of March before they submit their final bids by the end of March.

Sesa Goa exports iron ore to China, Japan, Europe and Taiwan, from its mines in Goa, Karnataka and Orissa.

Sources close to the development said these four were picked from six companies that had submitted their bids on February 19. Bids of the world's second-biggest mining and natural resources company Anglo American and Brazil's mining firm Rio Tinto were rejected.

Mitsui & Co has put up its 51 per cent stake in Sesa Goa for sale for quite some time. Morgan Stanley is Mitsui's advisor.

Sesa Goa has recently announced that it will raise prices for Japanese steelmakers by 9.5 per cent from April 1, which will make it a more cash-rich company. This might entice bidders to put a higher price tag for the majority stake in the company, the sources added.

Sesa Goa on February 19 signed contracts with Kobe Steel, JFE Steel Corp and Nisshin Steel to sell ore at more than $40 a tonne.

Founded in 1954, Sesa Goa sells a tenth of its 9.6-million tonne output in Japan and 58 per cent to customers in China and Taiwan.

The successful bidder will also have to buy 20 per cent stake from retail shareholders of Sesa Goa.

At today's closing price of Rs 1,947.85 on the Bombay Stock Exchange, Sesa Goa is valued at Rs 7667 crore. At this rate, the winning bidder will have to pay Rs 5443 crore for acquiring 71 per cent stake. Indian laws require the acquirer of Mitui & Co's 51 per cent stake to buy 20 per cent from retail shareholders as well.

Mitsui & Co bought the controlling stake about 10 years ago. Institutional investors hold 29.8 per cent, while the public holds 14.72 per cent.

Share prices of Sesa Goa today scaled a 52-week high of Rs 2,025. However, the scrip closed at 2.41 per cent lower than yesterday's close of Rs 1,995.90 in a weak market.

The company posted revenues of Rs 1,734.8 crore last year against Rs 1,423.8 crore a year ago.