Rain, Oxbow bids C$13.50 for GLC Carbon; draws Rain Commodities into bidding war

US-based Oxbow Carbon & Minerals Holdings, Inc. has bettered Rain Commodities’ offer of C$ 13.25 for the assets of Great Lakes Carbon Income Fund consisting of 73.56% ownership interest in GLC Carbon USA, Inc., the world’s biggest calcinated petroleum coke (CPC) maker.

Rain had acquired 20% ownership in the GLC Income Fund in March 2006 at an enterprise value for GLC Carbon at $656 mn. The company was looking at buying out the remaining equity and had entered into an agreement with the GLC Income Fund at a price of C$11.60 per unit. Oxbow entered the bidding on March 7 with an offer of C$13 per unit, forcing Rain to increase the bid to C$13.25. However, Oxbow seems to have bettered Rain’s revised bid with an offer of C$13.50 on Monday.

Oxbow is the world’s largest marketer of petroleum coke, a byproduct of oil refining, used in the production of electrodes for the steel and aluminum industries. Acquiring GLC Carbon will clearly give Oxbow a strangle-hold over the global market. Likewise for Rain, the acquisition means adding to its own substantial CPC capacity through wholly owned subsidiary Rain Calcining which will give it 28% market share in the West and a footprint across the Middle East, US and Argentina.

GLC Carbon has three plants in the US and one in Argentina. Rain has five days to make a revised offer. Oxbow also holds 5% equity in Rain Calcining which is set to be merged with the parent later this month. Rain stands to gain a break-up fee of C$17 mn in case GLC accepts another offer.

Read the article in DNA Money.
Related Post:
Rain Commodities enters bidding war for GLC Carbon; raises bid price

Rain Commodities enters bidding war for GLC Carbon; raises bid price

Rain Commodities has entered into a bidding war for the acquisition of GLC Carbon USA and has raised its bidding price from the earlier C$11.60 per share to C$13.25. The acquisition is being effected through Rain Commodities’ wholly-owned subsidiary, Rain Commodities USA Inc.

This raises the effective price for the acquisition of 73.56% in GLC from Rs. 1624 crores to Rs. 1873 crores. The hike in price is in view of the competitive bid for GLC made by Oxbow Carbon and Minerals Holdings, Inc, which offered a price of C$ 13.00 per share.

Under the amended agreement, the termination fee has also been increased from C$ 14.5 mn to C$ 17 mn. The termination fee will be payable to Rain Commodities by the GLC Income Fund, the holding company of GLC Carbon, in case a third party shows interest in buying GLC Carbon and the deal turns in favour of the third party.

The acquisition of GLC Carbon will make Rain Commodities the world’s largest producer of Calcined Petroleum Coke (CPC) with a total capacity of 2.43 mn tonnes per annum. The acquisition would be funded by a mix of debt, internal accruals and funds raised through QIP. Rain Commodities is also planning to merge group company, Rain Calcining, which is into CPC production, with itself to achieve business synergies.

Read the article in The Economic Times.
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Rain Commodities to buy Canadian carbon company for Rs. 1624 crores
Rain Calcining to merge with Rain Commodities

Rain Calcining to merge with Rain Commodities

Hyderabad-based Rain Commodities will merge Rain Calcining with itself in an effort to bring together the group’s calcined petroleum coke (CPC) and cement businesses for better viability. The merger, effective April 1, will create the world’s largest CPC making company with assets in India, Kuwait, the US and Argentina. It will enjoy nearly 28% of the total CPC sales in the Western World.

Under the merger plan, Rain Industries’ cement business will be transferred to Rain Commodities, while Rain Calcining’s CPC and power generation businesses will be transferred to Rain Industries. Rain Industries is the cement making unit of Rain Commodities. Rain Commodities will appoint financial and legal advisors for determining the share exchange ratio. The merger decision is a reversal of an earlier proposal to amalgamate Rain Industries with Rain Commodities.

Rain Calcining makes 480,000 tonnes of anode and industrial grade CPC per annum. CPC is a key process input used in the aluminium and steel industries. Earlier this week, Rain Commodities said it would acquire assets of Toronto-based Great Lakes Carbon Income Fund’s wholly-owned subsidiary Carbon Canada, Inc. for Canadian $ 437 mn (See Related Post).

Read article in Business Standard.