Rio’s bid for half of Riversdale stalls

The outcome of Rio Tinto’s bid for a majority stake in Riversdale Mining is expected to be announced today.

Rio wants to increase its coking coal assets by acquiring half the company with the extensive deposit in Mozambique.

Rio said today the two companies are still in talks, after the miner only got acceptance for a 41 per cent stake in Riversdale.

A statement from Rio said it currently has a 21 per cent interest in Riversdale and has received acceptance for just over 20 per cent of Riversdale shares.

The $3.9 billion takeover bid is conditional on at least half being accepted.

Rio’s inability to gain acceptance for the percentage wanted lies partly with Riversdale’s two major shareholders, two steel producers who collectively own 47 per cent, but have remained quiet on the issue since the first offer was made in December.

In a letter released by Riversdale to the Australian Securities Exchange today, Rio’s lawyer said the company “genuinely believes that an outcome of those discussions is likely to emerge during the course of the morning.”

The offer has been extended four times and if Rio does not reach the 50 per cent stake it wants, the offer for $16.50 per share is likely to revert to $16, remaining open until 16 April.

Riversdale shares closed trading yesterday, pending the announcement on the takeover bid.

Image: Riversdale Mining
 

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