Riversdale Inches Closer to Accepting $3.9 Billion Rio Tinto Bid

Rio Tinto extends its A$16.50-a-share offer for Riversdale by three trading days to “finalize the unwinding of equity swaps”

Rio Tinto appears to be getting even closer to obtaining more than 50 per cent interest in coal company Riversdale Mining, with the announcement that is has extended its $3.9 billion bid by three trading days to March 28.

This is the third time the deadline has been extended to accommodate Riversdale shareholders that were unsure about selling the company to Rio Tinto. Thanks to those extensions, Rio Tinto has now secured shares and commitments over 33.04 per cent of Riversdale shares. Rio Tinto still needs to reach 50 per cent ownership by the March 23 deadline it has set for its revised offer.

Rio Tinto originally offered Riversdale Mining A$16 per share, but with other Riversdale owners, CSN and Tata Steel increasing their stakes, Rio upped the offer to $16.50 last week. The increased share offer has secured more acceptances. “Rio can continue extending the deadline for its offer for 12 months, although it has said its sweetened bid is final unless a rival suitor makes a counteroffer,” the Wall Street Journal said Monday.

Rio Tinto CEO Doug Ritchie said last week, “There has been no sign of a competing proposal in the 11 weeks since the bid was announced. The choice of Riversdale shareholders is clear—accept the $16 or $16.50 on offer or risk seeing their share price return to pre-bid levels. There is no question that Rio Tinto’s expertise is crucial to overcoming the development challenges of Riversdale’s projects.”