The Hindu Business Line : Rain Commodities opts out of acquisition race

Hyderabad March 28 Rain Commodities Ltd (RCL) has opted out of the race to acquire assets of Great Lakes Carbon Income Fund, Canada in the wake of a higher bid price from Oxbow Carbon & Minerals Holdings Inc.

Oxbow came up with a proposal of Canadian $14.00 per unit in cash, to acquire all of the assets of the fund on March 20. This is effectively 20 per cent higher than the effective per unit price of C$11.60 set forth in RCL's agreement through its subsidiaries with the fund notified on February 5.

In a communiqué to the BSE, RCL today said keeping in the view the impact on the shareholder value, the company's wholly owned subsidiaries Rain USA and Rain Canada have opted not to exercise their right to match the Oxbow Proposal of C$14 per unit in cash and have notified the fund to that effect

On February 5, Rain USA had entered into a definitive agreement with Great Lakes Carbon Income Fund, Toronto, Canada, to acquire all its assets, consisting of 73.56 per cent ownership interest in GLC Carbon US Inc and certain unsecured subordinated notes of Huron Carbon ULC, a wholly owned subsidiary of GLC Carbon USA at an effective cash price of C$11.60 per fund unit.

On March 12, it amended the terms of their previously announced agreement and hiked the effective cash price per unit to be paid from C$11.60 to C$13.25 per unit, which was again increased to C$13.50 per unit on March 21.

Rain USA, had time till March 27, to match the Oxbow proposal.

Further, the company has informed that Rain USA has the option to sell its indirect 20.22 per cent stake in GLC Carbon USA Inc, acquired in March, 2006, as the fund is required to ensure that Oxbow makes an offer to each stockholder of GLC Carbon USA Inc to buy such equity interests, all in connection with the Oxbow Proposal.

Also Rain Canada shall be receiving a termination fee of C$ 17.00 million in cash from the fund prior to the fund entering into an agreement with Oxbow with respect to the Oxbow Proposal of C$ 14.00 per unit, all as required under the terms of the agreement with the fund notified on February 5.

The fund is a trust established to hold indirectly the securities of GLC Carbon USA Inc. The fund currently holds an indirect 73.56 per cent interest in GLC. GLC is the world's largest producer of both anode and industrial grade calcined petroleum coke.

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