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Rio Tinto closes in on Riverside Mining buyout


The mining giant has made a further bid to takeover the Australia-based company

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The mining group Rio Tinto is closing in on a full takeover of Riversdale Mining after a fresh bid worth £2.4 billion was enough to win over an extra eight percent of shareholders.

Supporters of Rio Tinto’s takeover bid now account for 26.13 percent of Riversdale shares but there is still some uncertainty about how the company’s two biggest players view the proposals.

Steelmakers Tata Steel and CSN collectively own 47 percent of the business and it is unclear whether either or both parties are keen to see a deal go ahead.

Rio Tinto has said that its latest offer of A$16.5 (£10.32) per share is final but almost all minority shareholders will need to accept the terms if neither Tata Steel or CSN signal their support for the proposals.

Tata, a long-time shareholder in Riversdale, has a director on the board who has backed Rio Tinto's offer, indicating Tata is not hostile to the bid.

Tata Steel managing director Hemant Nerurkar has said the company is mainly interested in securing coal supplies from Riversdale.

The wild card is Brazil's CSN, which recently raised its stake to just below the 20 percent threshold for making a full takeover offer, and has not publicly discussed its intention for the stake or possible talks with Rio Tinto.

If Rio's bid is not successful, Riversdale's shareholders are likely to face a big equity fundraising to help finance the development of its coking coal projects.

Rio shares were down 1.7 percent in early trade on Monday, while Riversdale was flat in a weak overall market.

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Rio Tinto closes in on Riverside Mining buyout
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