Rio Tinto bids for African firm
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Dec. 23: Anglo-Australian miner Rio Tinto offered $3.9 billion to buy African-focused coal miner Riversdale in an agreed deal that is likely to be challenged by rivals seeking to secure coking coal reserves.
Rio’s first big acquisition since its ill-timed Alcan buy in 2007 is a play on soaring Asian demand for the key steel-making ingredient, but needs the backing of at least one of Riversdale’s three large shareholders, including Tata Steel and Brazilian steel group CSN.
While fund managers said the steelmakers may oppose Rio’s offer, Riversdale managing director Mr Steve Mallyon said he expected a positive response. The company’s third largest shareholder, US-based fund Passport Capital, had committed an unspecified number of its shares to a pre-bid agreement that gives Rio Tinto options over 14.9 per cent of Riversdale’s stock, Mr Mallyon said.
“There has been no reaction either way although Passport has put some of its shares into the pre-bid agr-eement,” Mr Mallyon said. Tata Steel, whose nominee on the board abstained from voting on the bid, declined to comment.
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