Rio Tinto is submitting a bidder’s statement in relation to an Australian $16 a share off-market takeover bid for Riversdale Mining. On Monday Rio Tinto lodged the statement with the Australian Securities and Investments Commission. A copy was also sent to Riversdale Mining.
Riversdale mining is listed on the ASX and has profitable coal projects in Mozambique and South Africa. The $3.9 billion takeover bid from Rio Tinto was first announced on December 23. The board of directors of Riversdale Mining had recommended that the shareholders accept the offer in the absence of any other superior one.
Rio Tinto told Riversdale Mining that there was an attractive premium to the trading price of Riversdale shares prior to the announcement of the takeover bid announcement. There was also a warning that the company’s shares my drop in value in case the bid was not successful.
Earlier the Tata Steel representative on the Riversdale board of directors, Narendra Misra had not approved of the bid. However Rio Tinto has met the pre-bid agreement of 15% of Riversdale Mining’s current shares in issue. Tata Steel is the largest shareholder in the company with a 24% stake in it. Their stance on the takeover bid is yet not clear.