Rio Tinto launches $3.9 billion bid for Riversdale Mining

Rio Tinto, the world's third-largest mining company, yesterday launched a formal A$3.9 billion ($3.9 billion) bid for Australian coal miner, Riversdale Mining- a move that has already made an Indian state-owned consortium to weigh a counter bid in order to gain control of 13 billion tones of coking and thermal coal in Mozambique.

The formal offer from the Anglo Australian miner came after Sydney-based Riversdale earlier this month had announced that it was in talks with Rio Tinto about an A$15 a share or around A$3.5 billion takeover offer and hinted that it was in talks with at least one other unnamed suitor. (See: Rio Tinto may overtake Tata Steel as Riversdale's largest shareholder)

Rio Tinto's latest offer, which is contingent on acceptance from half of Riversdale's shareholders, has been hiked by A$ 1 from or $16 per share from its earlier offer of A$15-a-share.

All the directors of Riversdale barring one and a few institutional investors have agreed to tender their 14.9-per cent interest to Rio Tinto's offer. (See: Tata Steel to evaluate Rio Tinto offer for Riversdale).

Tata Steel's Singapore-based subsidiary Tata Steel Global Minerals Holdings, which holds a 24.21-per cent stake and a seat on the board of Riversdale abstained from voting on the deal - an indication that the world's seventh-largest steel company has kept its option open of making a counter offer.

Other stake holders in Riversdale are Brazilian steelmaker Companhia Siderurgica Nacional (CSN) with 16.29-per cent and San Francisco, California-based hedge fund Passport Capital with 16 per cent.