Coking coal developer Rocklands Richfield has halted takeover negotiations with Indian company Jindal Steel and Power.
The news caused shareholders to offload their stocks yesterday, with the company’s share price falling 25.42% from 27 cents to close at 22 cents.
The share price has also fallen 37.36 percentage points from 29.5 cents since the beginning of the week. Since September last year, the company has fielded takeover bids from Jindal, fellow Indian company Essar and China’s Meijin Energy Group.
Jindal matched Meijin’s offer, which valued Rocklands at $197 million, in January.
In a statement, Rocklands chairman Benny Wu said the board had terminated the discussions with Jindal because it concluded the deal was no longer in the best interests of the shareholders.
“Rocklands has invested substantial senior management time and other resources in its extensive discussions with Jindal,” he said.
“But, based on the latest Jindal proposal, the board no longer considers it in the shareholder’s best interests to continue these discussions.”
The company controls three high-grade coking coal deposits in the Bowen Basin of Queensland, Hillalong, Richfield and Rocklands, covering a total of 1200 km².
Rocklands also acquired steelmaker China Coke and Chemicals in 2007 and is planning to triple its output from 480,000 tonnes per annum to 1.2 million tonnes per annum.
In the event of a successful takeover, Jindal would have gained drilling access to Rocklands’ tenements, control of the China operations and the right to appoint a nominee to the target’s board.
The directors said they were confident of Rocklands’ prospects, due to the improved outlook for the global metallurgical coal sector.
The board will consider future opportunities under its current ownership structure.