Global miner Rio Tinto raised its offer for Mozambique-focused coal miner Riversdale Mining to $3.9 billion in a final bid to woo key shareholders who have held up the deal and gain control of coveted coal assets.
Investors doubted the move would be enough to secure the 50.1 percent acceptances Rio wants and sent Riversdale's shares down as much as 2.4 percent.
"The market's clearly a bit skeptical that it will get across the line," said Peter Chilton, an analyst at Constellation Capital Management, which owns shares in Rio Tinto.
Rio Tinto raised its offer price by 3 percent to A$16.50 per share on Thursday and extended the offer period for the third time, to April 1, but said the new offer was its final one if there were no competing offers.
Standing in Rio's way are India's Tata Steel , the world's No. 7 steelmaker, and top Brazilian steel producer CSN , who have increased their stakes in Riversdale since the bid and now hold a combined 47 percent.
Without their support, Rio would need nearly 100 percent acceptances from the rest of Riversdale's shareholders to get majority control.
"It's going to be quite hard," Chilton said.
As of March 4, Rio Tinto only had acceptances on 17.9 percent of Riversdale's shares.
Tata Steel and CSN have both said they are mainly interested in securing coking coal from Riversdale. Tata, which already has a stake in Riversdale's Benga coking coal project in Mozambique, has said it was talking to Rio about a range of options.
CSN has not publicly revealed its intention over the Riversdale stake or about its possible talks with Rio Tinto.
Analysts said the two companies would probably like to see Rio Tinto, with deeper pockets and more technological skills than Riversdale, developing Riversdale's Mozambique mines and infrastructure.
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