Target firm Rey Resources terms the bid unsolicited, tells shareholders 'take no action'.
India’s largest met coke producer Gujarat NRE Coke today said it had made a Rs 53.21-crore bid to take over the Australian mining company Rey Resources, which termed the move as “unsolicited” and decided to oppose it.
The Arun Jagatramka-led firm is looking to acquire about 90 per cent stake in the coal exploration firm in an off- market “all share, no cash” deal through its Australian arm, Gujarat NRE Minerals.
However, opposing the “unsolicited” takeover bid, Rey Resources recommended that its shareholders “take no action” concerning their shares in the company.
“We are offering about AUS $14 million to acquire the company in an off-market all share, no cash deal. The amount represents the current valuation of the shares,” said Arun Kumar Jagatramka, vice-chairman and MD, Gujarat NRE Coke.
Gujarat NRE Minerals (GNM), which holds about 16.64 per cent stake in the Australian entity, had yesterday indicated its intention of taking over the firm by offering one GNM share against every five shares of the target firm. Gujarat NRE Coke said that the present market cap of the Australian firm was around AUS $8-9 million.
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“We are the single largest shareholder of the firm. It has an estimated reserves of 500 million tonnes of thermal coal and our bid can give the company enough cash to pursue mining activity.
“With the proposed takeover, we are looking to add thermal coal in our portfolio,” Jagatramka said, adding that the target firm has just explored 10 per cent of the minable area it possesses.
Apart from the huge thermal coal resources, the Indian firm would get access to the valuable coal gas methane reserves, Gujarat NRE Coke said.
Rey Resources owns coal, oil and gas tenements covering large area in Canning Basin of Western Australia. It also has metal properties in South America.
Gujarat NRE Coke is undertaking expansion projects to more than double its coke producing capacity in the country to about 2.5 million tonnes by next year.