The Swiss-registered company Prominvest has offered €1.21 per share in Northern Iron, valuing the company to €449.3 million.
In May 2012 the Indian company Aditya Birling Group offered AUD €1.05-1.10 per share, an offer that was rejected by Northern Iron, as BarentsObserver reported.
Aditya Birling Group on July 23 sweetened its bid, offering €1.19 per share, prizing the company to €443.4 million.
Northern Iron said it planned to allow Aditya Birla to examine its books, and would make the same offer to Prominvest if it withdrew a request for exclusive access, Reuters report.
Prominvest was founded in 2001 and operates in sales of iron ore from Russia and the Ukraine. Annuale sales amounts to 3-8 million tons, Rosinvest’s web site reads.
Prominvest is also involved in the Arctic Bulk shipping joint venture with Northern Iron non-executive director Felix Tschudi’s Tschudi Arctic Transit. Arctic Bulk transports commodities such as liquefied natural gas and iron ore using the Northern Sea route, which is deemed a shortcut between Asia and Europe, according to Wall Street Journal.
Felix Tschudi is expected to cash in some NOK 669 million (€90.6 million) on a sale of his 20.3 percent of the shares, Dagens Næringsliv writes. Tschudi in 2006 bought a company in Kirkenes consisting of the mines, harbors, commercial properties and large land areas from the municipality for only NOK 102 million (€13.5 million)
Experts believe that Northern Iron probably will go for the Indian offer, even though it is lower than the Russian one. “The experience of Australian investors in dealing with Russian companies isn’t a good one”, Wall Street Jornal writes. In July Magnitogorsk Iron & Steel Works terminated an agreement with Australian Flinders Mines, walking away from its planned 554 million Australian dollar (US$567 million) takeover.
The Sydvaranger project in Kirkenes in northern Norway includes open-pit mines, rail, processing and port assets. Its export product is iron ore concentrate to the steel industry worldwide. The company is currently producing between two and three million tones of concentrate per year, but is evaluating the feasibility of doubling production to 5,6 million tons dry concentrate annually.
Aditya Birla Group is controlled by Kumar Mangalam Birla, one of the most successful businessmen of India. His conglomerate comprises of 16 companies and joint ventures in India as well as 22 international companies.
Aditya Birla Group is said to be worth US$ 35 billion (€27 billion).