Rio brushes off Glencore latest offer for coal mines, sticks with Yancoal www.mining.com
Rio Tinto (ASX, LON:RIO) has dismissed Glencore’s (LON:GLEN) sweetened bid for the coal assets on the block in Australia's Hunter Valley and said it is sticking with an offer from Yancoal Australia (ASX:YAL), a subsidiary of China’s Yanzhou Coal Mining.
On Friday, the Swiss miner and commodities submitted a second and improved all-cash offer of $2.68 billion only a few days after its previous bid was rebuffed.
Yancoal has been Rio Tinto’s preferred bidder since its offer was first announced in January.
Glencore was not only promising to pay all of the cash upfront instead of a portion in annual instalments, but has said it would hand Rio $225 million if the deal were to be blocked by regulators in China, Korea, Taiwan or Australia.
As an added bonus, it offered to let Rio keep the cash flows from the business until the deal completes.
But Rio Tinto confirmed Monday that it would opt for Yancoal, which has come back with a revised bid of $2.69bn, which includes at least $2.45bn in cash on completion.
Yancoal, which has been Rio’s preferred bidder since its offer was first announced in January, has also agreed to raise its break fee from $100m to $225m, which will be payable should the deal fail.
Rio also noted Yancoal’s bid includes financial assistance of $2.1bn from China-owned parent Yankuang Group.
The company’s shareholders will vote on the proposals at general meetings in London on Tuesday and Sydney on Thursday.
Published Date:2017-06-27