Tue, Aug 09, 2011 - Page 10 News List

Rio Tinto, Mitsubishi make offer for Coal & Allied

AFP, SYDNEY

Mining giant Rio Tinto and Mitsubishi Corp yesterday announced a joint proposal to take over Coal & Allied Industries (CNA) in an indicative deal that values the company at A$10.6 billion (US$11 billion).

The conditional, non-binding proposal would see Rio, the world’s second-biggest miner, and Japan’s Mitsubishi acquire all of the shares in Coal & Allied they do not already hold, at A$122 each.

This represents a 35.4 percent premium on Friday’s closing price.

The move saw Coal & Allied shares soar 27.7 percent to A$116.2, while Rio stock plunged about 5 percent in Australia to A$68.63.

The two companies, which hold 75.7 percent and 10.2 percent respectively of the miner operating in Hunter Valley, New South Wales, would end up with stakes of 80 percent and 20 percent respectively after the offer.

Perpetual Ltd is the only other major shareholder, with 6.3 percent of the stock, and Rio said it was supportive of the proposal.

Coal & Allied said it received the “incomplete, non-binding, conditional and indicative proposal” from Rio on Saturday.

“CNA gives no assurances that the indicative proposal will lead to a takeover offer being made,” the company said in a statement.

Coal & Allied is Australia’s sixth-largest coal miner by output.

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