Australia's Northern Iron rejects Aditya Birla's takeover bid

MELBOURNE: Australia's Northern Iron has rejected a takeover bid from Aditya Birla Group citing lower valuation and would be ready to consider a better offer from the Indian conglomerate.

A subsidiary of Aditya Birla Group had made an indicative and non-binding bid, offering to buy each share of the Australian entity in the price range of $ 1.28 - 1.35.

Noting that the takeover proposal does not completely reflect the company's value, Northern Iron today said it has decided to decline the offer.

"However, the company board will allow access to certain limited due diligence information so that Aditya Birla Group may see fit to make a higher indicative, non-binding proposal, if it so wishes," Northern Iron said in a filing to the Australian Stock Exchange.

Going by estimates, Aditya Birla Group's indicative offer was worth about $ 500 million.

Northern Iron owns the Sydvaranger Iron Project in Norway. The project has a production capacity of 2.8 million tonnes per annum of magnetite concentrate and the firm is also looking to ramp up the same to 5.6 million tonnes per year.

According to the filing, the company has also received several indicative concepts and proposals. However, none of the proposals have progressed beyond the preliminary stage.