Australian regulator approves Rio Tinto's $3.9-bn Riversdale deal
22 January 2011
The Australian regulator approved mining giant Rio Tinto's takeover of Mozambique-focussed coal developer Riversdale Mining, paving the way for the $3.9-billion deal to through.
The offer that was tabled last month by Rio Tinto and unanimously recommended by Riversdale's board, was yesterday approved by The Foreign Investment Review Board, said Rio, the world's third-largest iron-ore miner in a statement.
Riversdale, which has operations in Mozambique and South Africa, is 56.5 per cent owned by two steel majors and California-based hedge fund Passport Capital.
Passport holding with nearly 16 per cent of Riversdale stock, has pre-committed to tender 7.9 per cent of its stake in Rio's offer and divested 2.7 per cent of last week. (See: Passport Capital sells 2.7 per cent stake in Riversdale Mining)
However the deal will not go through until one of Riversdale's two other major shareholders agree to tender their stake to Rio Tinto's offer. The takeover offer closes on 18 February, unless extended or withdrawn.
Tata Steel's Singapore-based subsidiary Tata Steel Global Minerals Holdings holds a 24.21-per cent stake and a seat on the board of Riversdale, while Brazilian steelmaker Companhia Siderurgica Nacional (CSN) holds 16.29-per cent.
The $3.9-billion question is which of the steel makers divests first? Tata Steel, which also holds a 35-per cent interest and a 40-per cent offtake in Riversdale's Benga coal project, has said that it would like to remain as a strategic investor in Riversdale.