Indian company Essar Mineral Resources has withdrawn its $144 million takeover bid for South Perth-based Rocklands Richfield, leaving Jindal Steel and Power's offer as the only one on the table.
Indian company Essar Mineral Resources has withdrawn its $144 million takeover bid for South Perth-based Rocklands Richfield, leaving Jindal Steel and Power's offer as the only one on the table.
Shares in Rocklands, which had previously been in a trading halt, slumped on the news, with the share price falling nine cents, or 21 per cent, to a low of 33.5c.
At 11:37 AEDST, Rockland's shares were trading at 35.5c.
Rocklands only a fortnight ago received Essar's non-binding takeover proposal, which trumped Jindal's $121 million bid, launched at the end of August, and was recommended by Rockland's board of directors.
Jindal has since bought Rockland shares on market and currently holds a 12.75 per cent interest.
Rocklands said today that it had been notified in writing by Essar that it no longer wished to proceed with its proposal, and did not provide a reason.
Rocklands has subsequently written to Essar to seek clarifications on the takeover withdrawal, however with Indian festivals and ongoing vacations, Essar said it will reply to the request next week.
"The previously announced preliminary, non-binding and conditional proposal from Jindal remains on track with Jindal continuing its due diligence investigations of RCI," Rockalnds said.
The announcement is below:
On 7 October 2009, the Directors of Rocklands Richfield Limited (RCI or Company) announced that RCI had received a preliminary, non-binding and conditional proposal from Essar to acquire 100% of the shares in RCI for $0.50 cash per share (Essar Proposal).
The Company has now been notified in writing by Essar that it no longer wishes to proceed with its proposal and that accordingly the Essar Proposal is formally withdrawn.
Shareholders should note that Essar was not provided with any confidential, non-public information of RCI between the date RCI received the Essar Proposal and the date Essar withdrew that proposal.
Accordingly, RCI reasonably infers that Essar's decision to withdraw its proposal is based on external considerations, including information that became publicly available after 7 October 2009, being the date the Essar Proposal was announced.
RCI has written to Essar to seek clarification of Essar's reasons for withdrawing its proposal and to determine whether it is possible that Essar may wish to continue with its proposal, including on amended terms.
Essar has acknowledged receipt of RCI's letter and stated in response that, due to the Diwali festival in India and ongoing vacations of Essar personnel, Essar will discuss RCI's letter internally next week and reply to RCI following those discussions.
RCI will keep shareholders informed of Essar's response and of any other material developments in relation to the Essar Proposal.
The previously announced preliminary, non-binding and conditional proposal from Jindal (Jindal Proposal) remains on track with Jindal continuing its due diligence investigations of RCI.
RCI will keep shareholders informed of all material developments with respect to the previously announced Jindal Proposal.
