The deadline for the possible takeover of Riversdale Mining by Rio Tinto is up and the fate of the $4 billion transaction is sealed as Rio fell short of the 50% votes that were needed to push the deal through.
Rio Tinto had said that if it did not manage to get the 50% votes by yesterday’s deadline it would revert to its original offer of $16 per share with a fresh deadline of April 6, 2011. It was offering $16.50 per share and this was the fourth time that the deadline had been extended.
The Sydney based Riversdale Mining has two major shareholders in Tata Steel from India and CSN from Brazil. The two of them control nearly 50% of the votes in the company. It was largely their decision that prevented Rio Tinto from getting the takeover bid passed.
Despite the uncertainty of the bid process the shares in Riversdale Mining have shot up steadily over the last couple of months. The mining giant wanted to acquire the company so as to access a colliery in South Africa and two coking coal projects in neighbouring Mozambique.
The deal would have been the first major acquisition for them since the 2007 acquisition of Canadian aluminum producer Alcan.