bhushan steels aussie takeover in freshdoubt

http://www.business-standard.com/india/news/bhushan-steel/s-aussie-takeover-in-fresh-doubt/373111/

Bhushan Steel's Aussie takeover in fresh doubt
Ishita Ayan Dutt / Kolkata October 13, 2009, 0:10 IST

Bhushan Steel (Australia)’s acquisition of Australian coal and mineral exploration company, Bowen Energy, has hit the Australian Takeovers Panel hurdle, with the board ordering a re-valuation of the coal tenements held by Bowen.

If the valuation is different from earlier, Bhushan may be required to divest the shares it got under its takeover offer to those who want these back. The decision was in response to an application by Macrae Holdings. Bhushan sources confirmed the development.

Bhushan Steel (Australia), part of the Bhushan Steel group, a Delhi-based cold-steel roller, announced an open offer for Bowen at 14 cents per share on July 10. The bid closed on August 26 and Bhushan had voting power in 58.81 per cent of Bowen at the end of the bid. Prior to the offer, Bhushan had earlier held a 23 per cent stake in Bowen.

On July 24, Bowen issued a target’s statement, attaching an independent expert’s report by Howrath. The report included a revised independent valuation of the coal tenements held by Bowen from Minnelex Pty Ltd, which valued Bowen’s shares at 3.53 to 5.51 cents each.

Bowen Energy has 2,400 sq km of prime exploration ground in the heart of the Bowen basin, close to major mines operated by BHP, Rio Tinto, Xstrata and Anglo Coal. The company has licences for thermal and coking coal. Bowen’s projects also include uranium, but Bhushan’s interest is in thermal and coking coal.

The takeover panel found material deficiencies in Minnelex’s July 23, 2009, report, regarding some of the values found, as well as the logic involved and compliance issues. So, the panel made a declaration of “unacceptable circumstances”, as the acquisition of control over Bowen shares had not taken place in an efficient and competitive manner. The panel has ordered that the independent directors of Bowen procure a report by a new independent expert to provide a satisfactory valuation of Bowen as on July 23.