Its getting to the business end of the RIO offer and time will soon tell whether a counter offer will emerge. Here's another indication that ICVL will counter bid:
International Coal Ventures (ICVL), a consortium formed by SAIL, Coal India, NMDC, RINL and NTPC, to bid for Australia?s Riversdale Mining
International Coal Ventures (ICVL) is likely to bid for Australia?s Riversdale Mining, said reports. International Coal Ventures is a joint venture firm between five public sector units; an Indian consortium comprising of five states run companies. The consortium is keen on the acquisition of the Australian miner.
Rio Tinto, another Australian mining major, had already made an offer for a 14.9 per cent stake in Riversdale Mining, pegged at a price of $16 per share. Rio Tinto?s offer sums up to a consideration of $3.9 billion.
Partha S. Bhattacharyya, chairman of Coal India and a board member of ICVL said the board of ICVL listened to the whole proposal of Citigroup; the banker appointed to study the feasibility of the acquisition and may indicate its next move. According to Bhattacharyya, in the next couple of days ICVL will examine the financial implications such as what the return on equities would be if the group had to bid at a higher price.
ICVL, a joint venture between SAIL, Coal India, NMDC, RINL and NTPC, had in December appointed banking giant Citigroup to make feasibility study on Riversdale acquisition and advise it on whether to bid.
However, commenting on the plans, C.S. Verma, chairman of SAIL, who is also the chairman of ICVL reiterated that the consortium has had to schedule another board meeting on January 27 (Thursday) where a final decision will be taken whether ICVL will make a counter-bid for Riversdale or not.
Incorporated in May 2009, ICVL is a consortium formed by SAIL, Coal India, NMDC, RINL and NTPC to acquire mining assets. In December it hired Citigroup to study the possibility of bidding for Riversdale that has 13 billion tonnes coking and non-coking coal reserves in its Benga and Zambezi mines in Mozambique.
If ICVL has to counter the Rio Tinto bid price for Riversdale, it should be more than $16 a share. In a report last month, Tomas Vasquez, an analyst with Commonwealth Bank of Australia, said a counter-bid would have to be as much as $20 a share. Other analysts believe a share price of $18 will be acceptable to Riversdale shareholders.
Riversdale?s major shareholders include Tata Steel, which owns about 24 per cent in the company, Brazilian steel maker CSN and US investment firm Passport Capital. The three shareholders account for a 51 per cent stake in Riversdale.
