Rio Tinto has now amassed a 49.53% stake in Riversdale Mining. The increased offer of $16.50 per share has helped them gain support for a takeover by the Riversdale Mining board in the absence of a superior offer.
Now Riversdale has added three officers from Rio Tinto onto its board of directors. Riversdale Mining said Douglas Ritchie, chief executive of Rio's energy business, David Peever, managing director of Rio Tinto Australia, and Matthew Coulter, chief development officer of Rio's coal operations, have joined its board effective Thursday.
The executive Chairman Michael O'Keeffe and non-executive director Andrew Love will resign from their posts as Rio Tinto acquires a more than 50% stake in the company. The offer period which has been extended for the fifth time is due to close on April 20, 2011.
The Sydney based company has two big share holders that together own 47% of the company. These are Tata Steel from India and Cia Siderurgica Nacional of Brazil. They bought more shares in the company after Rio Tinto announced its takeover bid hoping to frustrate them. It was because of these two stake holders that Rio Tinto was unable to gain the requisite stake in Riversdale Mining much sooner.
Riversdale Mining has a colliery in South Africa and two attractive coal mining projects being developed in Mozambique. Coal being a key ingredient in steel making both Tata Steel and CSN are trying to safeguard their raw resources by claiming more of a stake in the mining company.