Gujarat NRE Minerals (GNM), an Australian subsidiary of Gujarat NRE Coke, country’s largest met coke producer, is planning to make an off market acquisition of the Australian mining company, Rey Resources. Rey Resources has termed the move as unsolicited and has opposed it.
With the proposed takeover, Gujarat NRE Coke is looking to add thermal coal to its portfolio.
Gujarat NRE Coke has made a Rs 53.21 crore bid to takeover the Australian company. The company, led by Arun Jagatramka, is looking at acquiring a 90% stake in the Australian coal exploration firm in an ‘all share- no cash’ deal, through its Australian subsidiary.
The offer price includes a 40.6% premium on Rey’s last trading price and a 42% premium on Rey’s volume weighted average price (VWAP).
According to a Business Standard report, Rey Resources has asked its shareholders to take no action concerning their shares in the company, opposing the “unsolicited” takeover bid.
Gujarat NRE Minerals, which holds around 16.64% stake in Rey Resources, has offered one GNM share against every five shares of Rey Resources. According to Gujarat NRE Coke, the present market cap of the Australian firm is around AUS $8-9 million.
Rey Resources owns gas, oil and coal tenements covering large area in Canning basin of Western Australia. The company has 500 million tonnes of coal resources that have potential for medium to large scale developments. Rey also has base metal properties in South America.
The takeover of Rey will provide Gujarat NRE Coke with an additional 500 million tonnes of coal resources and coal gas methane. Gujarat NRE Coke has a met coke production capacity of over 1 million MT and is also setting up plants for producing 1.25 million MT in Karnataka and Andhra Pradesh.
