Gujarat NRE to make buy out offer to Australia's Rey

Mining firm Gujarat NRE Coke today said it will acquire Australia-based Rey Resources Ltd in an all stock deal.

Gujarat NRE Minerals, the Australian subsidiary of Gujarat NRE Coke, today said it intends to make an off-market takeover offer for acquiring all the issued shares in Rey.

Under the takeover offer, the shareholders of Rey would get one Gujarat NRE Mineral share for every five shares held.

The share-swap deal values Rey Resources at 0.09 Australian dollar per share, which represents a premium of 40.6 per cent over its closing share price of June 2.

Shares of Rey closed at AUS Dollar 0.115, up 57.53 per cent on the Australian Securities Exchange yesterday.

Ernst & Young Transaction Advisory would act as lead corporate adviser for the said deal.

"Gujarat's offer provides Rey shareholders the opportunity to gain exposure to a larger coal company and the ability to advance the exploration projects of Rey," Gujarat NRE Minerals Chairman Arun Jagatramka said.

Last month, Gujarat NRE Minerals had secured a $50 million long-term loan to support mine development in Australia.

As of April 2009, Gujarat NRE Ltd held a 16.64 per cent stake in Rey Resources.

Shares of Gujarat NRE Coke surged five per cent to hit upper circuit at Rs 56.80 in morning trade on the BSE.