Rocklands Richfield says it has terminated proposed takeover negotiations with Indian company Jindal Steel and Power after finding the terms and conditions unacceptable.
Rocklands Richfield says it has terminated proposed takeover negotiations with Indian company Jindal Steel and Power after finding the terms and conditions unacceptable.
The announcement is below:
Rocklands Richfield Limited (RCI or the Company) today announced that it has terminated negotiations with Jindal Steel & Power Limited (Jindal) in relation to Jindal's conditional, indicative proposal to acquire 100% of the equity in RCI (Jindal Proposal).
The Directors of RCI unanimously resolved to terminate negotiations with Jindal after reaching the conclusion that the overall terms and conditions of the Jindal Proposal were commercially unacceptable and not in the best interests of RCI or its shareholders.
Background On 22 September 2009, RCI announced that it had entered into a Term Sheet with Jindal regarding an initial conditional, indicative proposal from Jindal to acquire all of the ordinary shares in RCI (Initial Jindal Proposal) and to negotiate with Jindal on an exclusive basis the terms of a formal implementation agreement.
The proposal was subject to a number of conditions, including conditions relating to due diligence, regulatory approvals and other terms common in a proposal of this nature.
Under the Initial Jindal Proposal, Jindal expected to complete its due diligence by 31 October 2009 with a view to the parties executing an implementation agreement by 15 November 2009. After RCI received the Initial Jindal Proposal, RCI received unsolicited competing conditional, indicative proposals from the Essar Group of India (Essar) and from the Meijin Energy Group (Meijin) of China.
In accordance with the Term Sheet, RCI invited Jindal to match these competing proposals from Essar and Meijin with the result that the Initial Jindal Proposal was revised on several occasions. RCI's various announcements to ASX since 22 September 2009 set out the principal terms of these competing proposals, the terms of the revised proposals from Jindal, and the response of the Directors of RCI.
During the course of its negotiations with Jindal, RCI agreed to extend the period for Jindal to complete its due diligence on RCI to 15 December 2009 and to negotiate a formal implementation agreement with RCI on an exclusive basis until 31 December 2009.
During this period, RCI provided Jindal with all reasonable assistance, and sought to clarify with Jindal the status of its due diligence inquiries and to engage with Jindal regarding the negotiation of a formal implementation agreement.
Yesterday, following careful consideration of the Jindal Proposal, the Directors of RCI unanimously concluded that the overall terms and conditions of that proposal are not in the best interests of RCI and its shareholders and accordingly resolved to terminate negotiations with Jindal.
The Directors of RCI are confident of RCI's business and growth prospects from the improved global outlook for the metallurgical coal sector and a stronger metallurgical coke market in China.
The Directors of RCI are considering future strategic opportunities for RCI under its current ownership structure which they believe will maximise shareholder value in the medium to long term.
RCI's Chairman, Mr Benny Wu, said "RCI is disappointed that the negotiations with Jindal have not resulted in RCI being in a position where it is able to submit to its shareholders a formal takeover proposal that the Directors of RCI consider to be in the best interests of RCI shareholders."
"RCI has invested substantial senior management time and other resources in its extensive discussions with Jindal but, based on the latest Jindal Proposal, the Board no longer considers that it is in the best interests of RCI shareholders for RCI to continue these discussions".
"The Board and management of RCI remain committed to maximising value for RCI shareholders and to ensuring that any transaction that RCI enters into achieves this outcome. RCI is strongly positioned to generate growth from its business in the context of a positive environment for companies involved in the coal sector".
