SYDNEY, March 20 (Reuters) - Shares in Australian engineering firm Bradken Ltd dropped almost 5 percent on Wednesday after a court ruled against the company in a landmark “bid rigging” case involving the sale of a Canadian mining services company.
Bradken said it planned to appeal Tuesday’s decision by the Federal Court in Melbourne, which ordered the company to pay $22.4 million in damages.
Bradken was taken to court in the first test of an Australian law introduced in 2010 that broadened competition law to include bid rigging over a private equity deal involving the purchase and sale of Canada’s Norcast Wear Solutions in a single day.
The case has been brought by the owner of the takeover target, Swiss-based private group Pala Investments, which is controlled by a Russian oligarch, Vladimir Iorich, against Bradken.
Pala sold Norcast in July 2011 to New York-based buyout firm Castle Harlan Inc for $190 million. Seven hours later, Castle Harlan sold the firm to Bradken, a competitor of Norcast, for $209 million.
Lawyers for Bradken had argued there had been no agreement with Castle Harlan to on-sell Norcast.
A Pala spokesman said the company was “delighted with the outcome.”
Bradken shares were down 5 percent A$6.81 at 0020 GMT. The stock has dropped 14.5 percent since the Norcast deal.
Reporting By Maggie Lu Yueyang and Jane Wardell; Editing by Stephen Coates