25 JUL, 2012, ET BUREAU
MUMBAI: Delhi-based Jindal Steel & Power on Tuesday said it will acquire Canadian coal miner CIC Energy Corp for Canadian $116 million (about Rs 600 crore) in an all-cash deal, that will build Jindal's coal assets for future power projects.
Under the agreement with CIC, the Canadian company will be merged with JSPL's wholly-owned subsidiary, Jindal BVI and its existing shareholders would get Canadian $2 per share for their outstanding shares in the Canadian firm.
The share acquisition price values the total equity of CIC Energy at approximately Canadian $116 million, the Canadian firm said in a filing with the Toronto Stock Exchange. Jindal Steel is owned by Naveen Jindal. ET had reported on the impending transaction in its July 18 edition.
Last year, the JSW Group, owned by Naveen's brother Sajjan Jindal, had made a bid to acquire CIC, but backed out after protracted negotiations. Jindal Steel stepped in to leverage on the 2.4 billion tonnes of high grade thermal coal that CIC owns in Botswana. The Indian company made an offer of Canadian $2 for every share of CIC, which is a 65% premium to the volume-weighted average trading price of the Canadian firm's shares on TSX for the last month.
"In the current challenging economic and capital markets environment, we believe this offer provides fair value for CIC Energy shareholders," said CIC chairman Warren Newfield. A JSPL spokesperson declined to comment. The deal would give Jindal Steel control of the mines in Botswana and ensure fuel supply to the Indian company's power ventures, including its subsidiary Jindal Power. Shares of Jindal Steel which rose 0.76% after the announcement, ended up 0.1% to 414.70 on the BSE .
The CIC board has recommended the deal to its shareholders and a final approval from the members will be sought at a meeting on or before August 28. "The merger agreement provides for an outside date of October 9, 2012 for the completion of the merger," CIC said, adding that completion of the deal is subject to regulatory approvals, including from government of Botswana -- where it operates the coal mine.
MUMBAI: Delhi-based Jindal Steel & Power on Tuesday said it will acquire Canadian coal miner CIC Energy Corp for Canadian $116 million (about Rs 600 crore) in an all-cash deal, that will build Jindal's coal assets for future power projects.
Under the agreement with CIC, the Canadian company will be merged with JSPL's wholly-owned subsidiary, Jindal BVI and its existing shareholders would get Canadian $2 per share for their outstanding shares in the Canadian firm.
The share acquisition price values the total equity of CIC Energy at approximately Canadian $116 million, the Canadian firm said in a filing with the Toronto Stock Exchange. Jindal Steel is owned by Naveen Jindal. ET had reported on the impending transaction in its July 18 edition.
Last year, the JSW Group, owned by Naveen's brother Sajjan Jindal, had made a bid to acquire CIC, but backed out after protracted negotiations. Jindal Steel stepped in to leverage on the 2.4 billion tonnes of high grade thermal coal that CIC owns in Botswana. The Indian company made an offer of Canadian $2 for every share of CIC, which is a 65% premium to the volume-weighted average trading price of the Canadian firm's shares on TSX for the last month.
"In the current challenging economic and capital markets environment, we believe this offer provides fair value for CIC Energy shareholders," said CIC chairman Warren Newfield. A JSPL spokesperson declined to comment. The deal would give Jindal Steel control of the mines in Botswana and ensure fuel supply to the Indian company's power ventures, including its subsidiary Jindal Power. Shares of Jindal Steel which rose 0.76% after the announcement, ended up 0.1% to 414.70 on the BSE .
The CIC board has recommended the deal to its shareholders and a final approval from the members will be sought at a meeting on or before August 28. "The merger agreement provides for an outside date of October 9, 2012 for the completion of the merger," CIC said, adding that completion of the deal is subject to regulatory approvals, including from government of Botswana -- where it operates the coal mine.
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