Coal and Allied okays improved Rio offer

26th Aug 2011 07:04

The independent directors of Australian Stock Exchange-listed miner Coal & Allied have given the green light to plans by mining giant Rio Tinto and Japanese trading house Mitsubishi Corporation to take full ownership of the company.The decision to recommend an improved offer from Rio and Mitsubishi is subject to an independent expert concluding that the Scheme is in the best interests of Coal & Allied minority shareholders and there being no superior proposal.Under the proposed Scheme, Coal & Allied shareholders will receive cash consideration of A$125 per share, a A$3 increase when compared to consideration of A$122 per share announced on 8 August 2011. Coal & Allied shareholders will also get to keep a special dividend of A$8 to be paid soon. The special dividend is expected to be funded from existing Coal & Allied cash resources and/or from loans from Rio Tinto, Mitsubishi Development and Hunter Valley Resources.Rio Tinto, through a wholly-owned subsidiary, is Coal & Allied's largest shareholder, currently holding 75.71% of Coal & Allied shares. Mitsubishi Development, a subsidiary of Mitsubishi Corporation, currently holds 10.20 per cent of Coal & Allied shares.--jh