Rio Tinto, Mitsubishi to buy remaining of Coal and Allied for $1.55 billion
11 August 2011
Anglo Australian miner Rio Tinto and Japanese trading house Mitsubishi teamed up to buy the remaining shares they do not own in Coal and Allied Industries for $1.55 billion, valuing the Australian coal miner at $10.6 billion.
Rio and Mitsubishi, which own 75.7-per cent and 10.2-per cent stake respectively in the Brisbane-based coal company, made an initial offer of A$122 a share, 34 per cent premium to Coal and Allied's closing price of A$91, values the company at A$10.6 billion.
Under a negotiated agreement between Rio and Mitsubishi, post acquisition, Rio will hold 80 per cent of Coal and Allied while Mitsubishi will hold 20 per cent.
Rio will pay close to $500 million for buying an additional 4.3 per cent, while Mitsubishi will pay a little over $1 billion for acquiring 9.8 per cent of Coal and Allied.
Perpetual Ltd, the third largest shareholder in Coal Allied with a 6.3 per cent stake, has indicated it would support the offer in the absence of a superior bid.
Coal & Allied has coal operations in Mount Thorley Warkworth, Hunter Valley, and Bengalla areas in the Hunter Valley region of New South Wales.
Its products include thermal coal, semi-soft coking coal, and pulverised injection coal. The company's products are used in the electricity generation, steel production, and cement manufacture.
The latest move from Rio comes after the world's third largest mining company last month acquired Mozambique-focussed coal producer Riversdale mining for A$3.4 billion.