UPDATE: Rio Tinto Now Needs Riversdale Approval For Takeover
21 Januar 2011 - 10:42AM
Dow Jones News
Rio Tinto PLC (RIO.LN) said Friday the Australian Treasurer
approved its takeover bid for Riversdale Mining Ltd. (RIV.AU) and
now the company must woo Riversdale's board to close the deal.
The Australian approval was the main regulatory hurdle the miner
needed to clear for its A$3.9 billion offer for Riversdale made
toward the end of last year. The miner now needs to get approval
from at least 50% of Riversdale's board to finalize the deal.
Support from one of the prospective coal producer's major
shareholders--either India's Tata Steel Ltd. (500470.BY) or
Brazil's Cia. Siderurgica Nacional (SID)--will be key for the
takeover to be approved, a person familiar with the matter
said.
Riversdale has 13 billion metric tons in coking and thermal coal
resources, key materials in the steel production process, in its
Benga and Zambezi projects in Mozambique.
Mining analysts estimate that Mozambique will become the
second-largest producer of coking coal within the next 15 years
behind Australia, which currently accounts for two-thirds of all
global seaborne trade of the commodity.
Earlier this month, Rio Tinto said the Riversdale board of
directors recommended accepting the proposal by Rio Tinto to
acquire the company for A$16 a share.
Rio Tinto said all directors on Riversdale's board recommended
the proposal, apart from largest shareholder Tata Steel, who
abstained from voting. Tata Steel owns a 24% stake in Riversdale
and said at the end of December that it's not averse to Rio Tinto's
offer.
The offer is scheduled to close Feb. 18, but could be extended,
Rio Tinto said.
-By Devon Maylie, Dow Jones Newswires; +44 20 7842 9483;
devon.maylie@dowjones.com
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