Rio Tinto's $3.9 billion bid gets backing of full board of Riversdale
24 January 2011
Rio Tinto's $3.9 billion takeover bid for Riversdale has got the baking of the full board of the Africa-focused miner, including the representative of Riversdale's top shareholder Tata Steel, thereby diminishing the threat of a rival bid from the Indian company.
The Riversdale board, which includes Narenda Misra, who is the vice-president and group head of mergers and acquisitions at Tata Steel, unanimously recommended the Rio offer, for want of a better proposal.
However, Misra has backed the Rio Tinto bid as a Riversdale director and not as a Tata representative on the board. Although Tata Steel has reserved all rights in relation to its shareholding and response to the offer, Tata's capital constraints make it an unlikely counterbidder.
Tata Steel (24.34 per cent), Brazilian steel firm Companhia Siderurgica Nacional (15.56 per cent) and Passport (12.98 per cent) make up for 52.1 per cent of Riversdale's equity capital.
Rio, however, has structured its bid on a minimum acceptance condition of only 50.1 per cent.
Riversdale, which has coal projects in Mozambique, said it was unaware of any other offers in the works.