Northern Iron rejects Indian takeover bid
UPDATED: Australian Northern Iron, operating the Sydvaranger mine in Kirkenes, says on Tuesday it has turned down a takeover bid from Aditya Birla Group.
The Indian Aditya Birla Group submitted a non-binding bid for buying Northern Iron for a price between Australian $400 and 500 million (€310 and €388million), media sources in India reported on Friday.
The bid followed Northern Iron's wish from last November to review its ownership, as reported by BarentsObserver. Northern Iron said on Friday it had an approach from India’s Aditya Birla Group and continued negotiation for a bid that its board can support and recommend to shareholders. The negotiations have so far failed.
Northern Iron says on Tuesday it rejects the takeover bid, but has left the door open to an improved offer, reports The Wall Street Journal.
Northern Iron has also received other approches from unnamed parties regarding alternatives to a full takeover of the mining company.
The shares in Northern Iron made a 19 percent jump after the first bid became known in media last Friday, an investment portal in Australia reports. It was the Economic Times of India that first reported on Aditya Birla Groups’s $500 million bid. Northern Iron officials say to The Wall Street Journal that the Australian dollar 500 million (€388 million) bid has “no foundation,” but confirms the ongoing negotiations.
The Sydvaranger project in Kirkenes in northern Norway includes open-pit mines, rail, processing and port assets. Its export product is iron ore concentrate to the steel industry worldwide. The company is currently producing between two and three million tones of concentrate per year, but is evaluating the feasibility of doubling production to 5,6 million tons dry concentrate annually.
Aditya Birla Group is controlled by Kumar Mangalam Birla, one of the most successful businessmen of India. His conglomerate comprises of 16 companies and joint ventures in India as well as 22 international companies.
Aditya Birla Group is said to be worth US$ 35 billion (€27 billion).