India’s JSW to buy Canada’s CIC Energy for C$422 million

BANGALORE (BestGrowthStock) – Indian power producer JSW Energy Ltd (JSWE.BO: ) agreed to buy Canada’s CIC Energy Corp (ELC.TO: ) for C$422 million ($414.5 million), putting to end two-month long speculations on the coal explorer’s future.

JSW Energy’s offer of C$7.42 per share, is a premium of 43 percent to CIC’s close of C$5.20 on Monday on the Toronto Stock Exchange.

JSW Energy’s offer is, however, lower than the C$7.75 per share offer from a “multi-billion dollar conglomerate” in early October and an offer from an Indian conglomerate for an indicative price of C$8.72 in mid-September.

CIC, which explores and develops coal properties in Botswana, had declined to name either of the parties.

CIC agreed not to solicit alternative bids, but, has agreed to a termination fee of C$10.5 million to JSW if it accepts an unsolicited superior offer, it said in a statement.

CIC’s board has decided to recommend accepting the JSW offer after its financial adviser Deutsche Bank Securities Inc said the offer was “fair, from a financial point of view.”

CIC’s directors and officers, who hold the company’s stock, have agreed to enter into a lock-up agreement with JSW and tender their shares, the company said.

JSW Energy’s offer comes at a time when global firms are eyeing Canadian coal miners with Walter Energy Inc’s (WLT.N: ) $3.24 billion bid for Western Coal Corp (WTN.TO: ) last week being the most recent deal.

Motilal Oswal Investment Advisors Pvt Ltd is CIC’s strategic advisor.

CIC stock was up 34 percent at C$6.95 in afternoon trade. JSW Energy shares closed at 111.05 rupees Tuesday on the Bombay Stock Exchange.

($1=1.018 Canadian dollar)

(Reporting by Savio D’Souza in Bangalore; Editing by Gopakumar Warrier)

India’s JSW to buy Canada’s CIC Energy for C$422 million