Rio Tinto extends deadline on $3.9bn bid for Riversdale
The Age
Friday February 11, 2011
RIO Tinto has extended the offer period for its $3.9 billion takeover of Riversdale Mining by two weeks as one of its target's biggest shareholders sparked speculation that it might spoil the love-in between the two while it continues to creep up its register.Brazilian steel maker Companhia Siderurgica Nacional (CSN) has bought another 5.5 million shares to take its shareholding in Riversdale to 19.9 per cent.That news came only a day after it revealed it had spent $76.2 million at an average of $15.96 a share expanding its stake in Riversdale.But those close to the deal suggested that CSN was keen to get exposure to coking coal, an ingredient in steel making. Riversdale has a 14 billion-tonne coking coal resource in Mozambique."Coal is one of the key supply requirements that CSN doesn't have control over," the source said."They realised as a group that it was one area they needed to secure, and increasing their stake will give them more leverage to negotiating an offtake agreement. The only offer that is on the table is the Rio offer."Everyone has formed a view that Rio is better to bring the Benga and Zambeze projects into production and into export markets than Riversdale."Rio chief financial officer Guy Elliott said he would make only three points on the Riversdale deal: first, that it was a substantial premium to Riversdale's share price; second, that it had been recommended by the Riversdale board; and third, Rio had extended the offer."You can see from that where we stand," he said.If CSN was to combine its 19.9 per cent stake with India's Tata Steel's 24 per cent holding as a blocking stake, it would be close to preventing Rio achieving its minimum acceptance level of more than 50 per cent of Riversdale.Riversdale shareholders now have until March 4 to accept the Rio offer.Riversdale shares edged 10 closer to Rio's $16 offer price, ending yesterday's session at $15.95.Rio shares were up 30 at $88.68.
© 2011 The Age