Rio Tinto raises Riversdale bid again

Anglo-Australian mining giant Rio Tinto has made another increased bid for Riversdale Mining in an effort to convince shareholders to accept its acquisition proposal.

The new bid values the Australian owned coal miner at $4 billion. Rio first offered $3.5 billion last December, before improving the offer slightly later the same month.

The new bid represents an increase from $16 a share to $16.50, but Rio wants more than 50 per cent of shareholders to accept the bid by 23 March.

Rio pointed out there had been no sign of a competing bid since its first offer in early December, and that it would not increase its offer again in the absence of any other bidder.

"The choice for Riversdale shareholders is clear—accept the offer or risk seeing their share price return to pre-bid levels," said Rio Tinto Energy chief executive Doug Ritchie.

"There is no reason to delay acceptance."

Riversdale, headquartered in Sydney, does not have assets in Australia, however. The attraction for Rio Tinto is its coking coal projects in Mozambique.

Riversdale’s chief operating officer Andries Engelbrecht told Business Excellence in an exclusive interview last year that Mozambique was well placed to supply hard coking coal to emerging markets like India and Brazil, where the steel industry is booming and new coal-fired power stations are being built.

Mozambique had a significant freight advantage over Australian and Canadian suppliers, he said, because of the easy shipping route from Beira to India’s west coast coal ports.