Rio Tinto ups Riversdale bid to £2.5bn

23rd Dec 2010 07:13

Rio Tinto has increased its offer for Riversdale Mining to A$16 a share in cash, securing the backing of management for a deal worth A$3.9bn (£2.5bn).The mining giant admitted earlier this month it had talked to the Sydney-based firm, which has interests in African coal, about a A$15 a share takeover valuing the business at £2.2bn (A$3.5bn).Anglo-Australian firm Rio has entered into pre-bid agreements in relation to 14.9% of Riversdale's current shares on issue.But analysts think the company may have to raise the price again if it wants Riversdale shareholders like India's Tata Steel with 24% and Brazil's Cia. Siderurgica Nacional (13%) to give their consent.If Rio gets Riversdale it will get access to projects in Mozambique and South Africa, and a number of mines jointly owned with Tata Steel. "The acquisition of Riversdale is in line with our growth strategy of investing in, developing and operating large, long term, cost-competitive mines and businesses driven by the quality of each opportunity," Rio Tinto chief executive Energy, Doug Ritchie, said. "We believe Rio Tinto is one of the few groups in the world with the capabilities, values and incentives to develop the projects quickly and to a world-class standard, bringing considerable benefit to the people of Mozambique."