Aditya Birla group exits race to acquire Northern Iron
"On November 3, 2012, Essel Mining advised NFE that following its stage two detailed due diligence investigations, it was not in a position to submit a stage two proposal at this time," Northern Iron (NFE) has said in a filing to the Australian Securities Exchange.
Essel Mining, an unlisted subsidiary of the Kumar Mangalam Birla-led group, had sweetened its bid in July by about 8.53 per cent to AUD 1.40 per share (valuing NFE at AUD 518 million). Its first offer had failed to impress the Board of Australian mining firm.
Following the revised offer, Northern Iron had allowed Essel Mining to conduct stage two due diligence of its assets, and last month it had extended the time line for putting up a final bid to early-November.
"Essel Mining stated that the reason for their decision in related to the continued variability in production at the Sydvaranger project and the resultant impact on costs," NFE said.
Interestingly, Swiss trading firm Promnivest AG, which had topped the Essel's offer with a counter bid of AUD 525 million, has also exited from the process of acquiring NFE.
The Australian firm, which has a long term supply agreement with Tata Steel Europe, also said that it has decided to close the stake sale process.
NFE's Sydvaranger iron ore project is in northern Norway with more than 25 years of
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