Aditya Birla Group’s metals flagship Hindalco Industries on Tuesday agreed to accept the sweetened bid from Australian resource firm Metals X Limited (Metals X) to buy out Hindalco’s 51 per cent stake in Aditya Birla Minerals Limited (ABML).
Under the proposed deal, Metals X will acquire 4.5 ABML shares in exchange for one fully paid ordinary share of Metals X and A$0.8 in cash for every ABML share held, valuing the company at 32.9 cents a share or $103 million. Post the announcement, Hindalco shares gained 5 per cent to close at Rs 103.15 in the Mumbai market on Tuesday, adding Rs 1,000 crore to its market capitalisation of Rs 21,300.
“Hindalco has communicated to ABML its intention to accept the offer subject to receiving the approval of the Reserve Bank of India and no bona fide superior proposal being announced by a third party within five business days of Metals X announcing its intention to make the offer,” said Hindalco in a notification to the exchanges.
Metals X and ABML have been in a long-drawn takeover battle for close to a year. Metals X initially offered one of its own shares for every five shares of ABML, valuing the company at 24.7 cents a share.
Metals X already holds 29.7 per cent stake in the company and following the deal, Metals X stake in ABML will increase to 80.7 per cent. The offer was due to close on April 28; however, Metals X has announced its intention to extend the offer period to close on July 29, 2016. Metals X plans to support the additional cash component of the offer through a specific purpose loan facility of A$25 million with Citibank.
