RIV - Riversdale Mining

[bigdog]

Along way for RIO to get to 50%, but now 16.99%.

Will RIO get 50%????

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01157050

1/03/2011 9:57:00 AM RIO: Institutional Acceptance Facility update - Riversdale

1 March 2011
Notice of change of interests under Institutional Acceptance Facility

We refer to the institutional acceptance facility (Acceptance Facility) established by Rio
Tinto Jersey Holdings 2010 Limited (RTJ) on the terms set out in the First Supplementary
Bidder's Statement dated 10 February 2011 in relation to its takeover bid for all the
shares in Riversdale Mining Limited (Riversdale).

Since RTJ's most recent substantial holding notice relating to Riversdale dated
16 February 2011, the aggregate of:
• the number of Riversdale shares in respect of which acceptance instructions (in
the form of acceptance forms and/or directions to custodians to accept RTJ's
offer) have been received in the Acceptance Facility as at 7.30pm, yesterday; and

• the number of Riversdale shares in which RTJ and its associates have a relevant
interest, has changed from 15.97% to 16.99%.

 

[bigdog]

In all this makes Rio Tinto’s climb to 50 per cent control look all but impossible at these levels

http://www.theaustralian.com.au/bus.../story-e6frg9io-1226014114464?from=public_rss

Tata Steel boosts stake in Riversdale
John Durie From: The Australian March 01, 2011 12:50PM

INDIAN giant Tata Steel appears to have raised the stakes in the battle for Riversdale Mining, with the purchase of just under 2 per cent of the stock this morning in a crossing by house broker Hartley Poynton.
Market speculation was building that Tata was creeping up the register and today’s move would lift its holding, together with past purchases, at about 27 per cent.

Brazilian miner Siderurgjca owns another 19.9 per cent, which means in combination the two would have a combined 46 per cent against Rio at around 17 per cent.

In all this makes Rio Tinto’s climb to 50 per cent control look all but impossible at these levels.

Its present bid for the African coal explorer is at $16 a share.

At this stage, with Riversdale trading well off its high for the day at about $15.18 a share against a high of $15.70, it would seem the market is thinking Rio’s bid isn’t looking good at this stage.

Separately, the Australian Stop Exchange has confirmed this morning the issue which caused its stoppage yesterday was a malfunction in its “Taylor Made Combination” -- a program which allows easy trading in it options and physical stocks at the same time.

The program has run into problems in the past and has now been taken off the market while the ASX folk work out exactly what has happened.

Trading is proceeding as per normal and brokers say while the absence of the Taylor platform is an inconvenient the problem is not terminal.

 

[bigdog]

9:00 a.m. 2nd March 2011 Change in substantial holding
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01157503

Tata Steel, already Riversdale's biggest shareholder, spent more than A$100 million ($101 million) upping its stake in Riversdale to 27.1 percent from 24.2 percent, according to a shareholder notice

http://www.reuters.com/article/2011/03/02/us-riversdale-tata-idUSTRE72118220110302

Tata Steel's Riversdale stake hike spells trouble for Rio bid
By Sonali Paul
MELBOURNE | Wed Mar 2, 2011 1:45am EST

MELBOURNE (Reuters) - India's Tata Steel (TISC.BO) has raised its stake in Australia's Riversdale Mining (RIV.AX), making it harder for miner Rio Tinto (RIO.AX) to seal its $3.9 billion bid for the Mozambique-focused coal miner.

Riversdale shares fell as much as 6.5 percent to a three-month low of A$14.48 on Wednesday, valuing the group 10 percent below Rio's offer, indicating growing doubts about the deal going ahead.

"The share price is telling you that the market thinks that it's going to end in a stalemate, the deal will fall over and Rio will walk," said CLSA analyst Hayden Bairstow.

Tata Steel, already Riversdale's biggest shareholder, spent more than A$100 million ($101 million) upping its stake in Riversdale to 27.1 percent from 24.2 percent, according to a shareholder notice, confirming what sources had told Reuters.

Riversdale's second-largest shareholder, top Brazilian steelmaker CSN (CSNA3.SA), also recently increased its stake in the Australia-listed company to 19.9 percent.

Tata Steel, the world's No. 7 steelmaker, and CSN now own 47 percent of Riversdale, making it extremely difficult for Rio (RIO.L) to secure the 50.1 percent acceptances it wants before going ahead with the deal.

Rio now needs almost 100 percent acceptances from minority shareholders and has so far won over just 17 percent of the company.

"Rio seems to be in extreme difficulty," said Gregory Lafitte, Asia merger arbitrage trader at LCM in Hong Kong.

"It's possible to see Rio Tinto reduce the 50 percent acceptance condition or reach a strategic agreement with Tata and CSN," he said.

Rio Tinto declined to comment on the status of its talks with Riversdale's shareholders.

SECURING COAL SUPPLIES

Rio last month extended the offer deadline to March 18 after Tata Steel said it had yet to decide whether to hold or sell its stake.

Tata Steel Managing Director Hemant Nerurkar told Reuters last month the company was mainly interested in securing coking coal from Riversdale for its steel mills and was talking to Rio about a range of options.

Tata already has a stake in Riversdale's Benga coking coal project in Mozambique with an agreement to buy supply from the mine.

CSN said when it bought into Riversdale it wanted to secure coking coal supplies, but it has not said anything about its intentions since Rio Tinto launched its bid.

0329

 

[bigdog]

http://www.theaustralian.com.au/bus.../story-e6frg9e6-1226015235980?from=public_rss

September target for Riversdale coal exports
Alex MacDonald From: Dow Jones Newswires March 03, 2011 11:16AM

TAKEOVER target Riversdale Mining expects to start exporting coking coal from its Mozambique project by September.

Leon Fanoe, Riversdale’s Benga project’s general manager, said the company aims to start mining coal in March, expects to complete construction of its coal processing plant in September and plans to put its first coking coal “on a ship” at the port of Beira that same month.

Riversdale is spending over $US1 billion to develop Benga, located in the Tete coal basin. Benga, which is 65 per cent-owned by Riversdale and 35 per cent-owned by India-based Tata Steel, is one of two mega-coal projects that will start exporting coal from the Tete basin in large quantities this year.

The Tete basin has attracted investment from mining companies and steelmakers from around the world due to its vast resource of high-quality coking coal, a key ingredient in steel making.

Brazilian mining titan Vale is spending $US1.66bn to develop the adjacent Moatize coal project, which is expected to start shipping coal at end-June or early July.

Anglo-Australian diversified miner Rio Tinto is also interested in the Tete Basin and has offered to purchase Riversdale for $US3.9bn. Riversdale’s board has recommended shareholders accept in the absence of a superior offer. Rio Tinto has twice extended the deadline for its bid, last week moving it to March 18.

Riversdale’s coal assets in Mozambique have attracted a lot of suitors who are either interested in investing in the company or in its projects. Tata Steel and Brazilian steelmaker CSN recently raised their stakes in the company to a combined 47 per cent of the voting shares.

The Benga project is being developed in phases, with the first phase designed to produce 1.7 million tonnes a year of hard coking coal and 300,000 tonnes a year of thermal coal, for use in power stations, from 5.3 million tonnes of mined coal.

Riversdale expects to export 200,000 tonnes of coking coal this year and sell up to 90,000 tonnes of thermal coal, depending on available transport infrastructure. It has secured port capacity but not rail capacity as of yet, Mr Fanoe said.

Riversdale plans to increase output from the mine in subsequent years, with plans to process 10.6 million tonnes of coal into 3.3 million tonnes of coking coal and up to 2.2 million tonnes of thermal coal from 2013, Mr Fanoe said.

By 2014-15, Riversdale plans to be able to process 20 million tonnes of coal annually, resulting in 6 million tonnes of coking coal and 4 million tonnes of thermal coal.

Riversdale is also looking at alternative ways to send coal to Beira, Mr Fanoe said, including a feasibility study into sending coal down the Zambezi river to Chinde and then on to the port. Riversdale expects this could start by late 2012 or early 2013.

Benga, the first of Riversdale’s two major projects slated for the Tete basin, has a measured, indicated and inferred resource base of 4.03 billion tonnes. Tata Steel has rights to 40 per cent of coking coal produced during the life of the mine.

The company’s other mining plans, the Zambeze coal project, is expected to have a feasibility study completed by the end of 2012 and hopes to start producing coal by the middle of 2014.

David West, the principal geologist on the Zambeze project, said the company has 10 drill rigs on site and an exploration staff of 60 people, including 26 geologists, to complete the feasibility study on the 24,700ha Zambeze project.

The Zambeze project is forecast to eclipse Riversdale’s Benga project in terms of resource base and annual production. The Zambeze project has a resource base of 9.05 billion tonnes of coal compared with Benga’s 4.03 billion tonnes of coal resources.

The project has the potential to extract up to 90 million tonnes of coal annually, although current plans are to process 45 million tonnes of coal into roughly 15 million tonnes of coal products annually. The product mix would be two-thirds coking coal and one-third thermal coal. Thermal coal is used to fuel coal-fired power stations.

Mr West said the 9.05 billion indicated and inferred resource base means Zambeze could have “a life of mine of 25 years or even more.” At a certain stage in the project, Riversdale will have to move Tete’s international airport to a different location in order to continue mining the deposit, Mr West said.

 

[bigdog]

http://www.theaustralian.com.au/bus.../story-e6frg9io-1226015924639?from=public_rss

Decision looms for Rio Tinto's rising star Dough Ritchie
John Durie From: The Australian March 04, 2011 1:09PM

DECISION day looms for Rio Tinto energy boss Doug Ritchie as the warring parties position themselves ahead of the deadline for his $3.9 billion bid for Riversdale Mining.

Rio has several choices: the highest risk but arguably most sensible would be to let the bid lapse next Thursday and test Tata and CSN's resolve.

This would be based on the assumption that neither Tata nor CSN wants to operate the Mozambique-basin coking coal assets in question and want Rio to take control with a good offtake agreement for them.

The takeover rules prevent any side deals, so the offtake agreements are off limits.

Without a bid the Riversdale stock price would head towards $12 a share in a big hurry, so the hedge funds would be caught.

They, however, know what is at stake here as well.

This is Rio's first public bid since the Alcan disaster.

The man running the deal is Dough Ritchie, who is a rising star in the company and in line to be the next boss, so he wants to emerge looking good.

The hedge funds preferred course would be a safe bet for Ritchie to increase the offer contingent on 50 per cent acceptances.

Then again, why should Rio pay more when it has board approval and right now is the only player in the game?

As those dynamics work through Rio chair Jan Du Plessis has initiated a major overhaul of his board with Yves Fortier and Sir Rod Eddington to step down after the May annual meeting and Andrew Gould to leave next year.

Replacements are being sought and high on the list of Australian possibilities is former Newcrest boss Ian Smith, which presumes he will step down from the Newcrest board for the honour.

His name would then also be included on the list for possible replacements for Tom Albanese when he leaves.

Florida-based hedge fund Samana Capital today said it had reduced its stake in Riversdale by 1 per cent to 5.4 per cent, but such is the nature of this battle that the news pushed the Riversdale stock price up 2.4 per cent to $15.16 a share.

This, it should be noted, is still well below the $16 a share bid price which expires on March 18.

Rio has to declare its hand next Thursday, one week before the bid lapses.

Samana's and Passport Capital's 13 per cent stake means that hedge funds control at least 18.4 per cent, Brazilian miner CSN has 19.9 per cent, Indian Conglomerate Tata has 27 per cent and Rio has a couple of a per cent with a desire to get to 50 per cent.

Rio has its foot on more shares thanks to pre-acceptance deals, which lifts it holding to about 17 per cent

Tata and CSN are not best friends, having been on either side of the battle for steel maker Corus, which Tata won.

This explained why last month, when CSN increased its stake to 19 per cent, Tata responded as soon as it was legally able by lifting its stake to 27 per cent.

When this happened the Riversdale price dropped because punters thought the takeover wouldn't happen.

 

[bigdog]

The market did not like this ANN!!!
SP RIV14.950 $-0.180 -1.190% @ Thu 10 Mar 2011 10:43 AM

10/03/2011 10:06:00 AM RIO: Improvements to Rio Tinto`s bid for Riversdale
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01160341

10 March 2011

Improvements to Rio Tinto's bid for Riversdale
• Offer Price increase to $16.50 if Rio Tinto obtains more than 50 per cent
interest by 23 March 2011
• No offer price increase beyond $16.50 in the absence of a competing
proposal
• Rio Tinto frees Bid of all conditions other than the 50 per cent minimum
acceptance condition
• Accelerated five business day payment terms if the Bid becomes
unconditional
• Offer period extended by two weeks until 1 April 2011

0532

 

[bigdog]

I have now accepted RIO offer because it is the best company to run this mine!!
-- also the current overall market climate is a worry
-- IMO it would be in the interest of Tata Steel and Brazil's CSN to dispose of enough shares to ensure that RIO reaches the 50% at the 11th hour!!!

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01163592
Todays ASX ANN

21 March 2011
Notice of change of interests under Institutional Acceptance Facility

We refer to the institutional acceptance facility (Acceptance Facility) established by Rio Tinto Jersey Holdings 2010 Limited (RTJ) on the terms set out in the First Supplementary Bidder's Statement dated 10 February 2011 in relation to its takeover bid for all the shares in Riversdale Mining Limited (Riversdale).

Since RTJ's most recent notice to ASX relating to its interests under the Acceptance Facility dated 18 March 2011, the aggregate of:
• the number of Riversdale shares in respect of which acceptance instructions (in the form of acceptance forms and/or directions to custodians to accept RTJ's offer) have been received in the Acceptance Facility as at 9.00am, 21 March 2011; and
• the number of Riversdale shares in which RTJ and its associates have a relevant interest, has changed from 33.04% to 34.94%.

------------------------------------------------------------------------------------------------------------------------------
Roughly 80 per cent of Riversdale's shares are now in the hands of three companies - Rio Tinto, Tata Steel and Brazil's CSN.

Late last year, Rio offered $16 a share for Riversdale, only to be frustrated when Brazil's CSN lifted its stake in Riversdale to 20 per cent and then Tata Steel early this month raised its stake to just over 27 per cent.

 

[bigdog]

http://www.marketwatch.com/story/rio-tinto-riversdale-acceptances-now-at-359-2011-03-22

March 22, 2011, 7:04 p.m. EDT

Rio Tinto: Riversdale acceptances now at 35.9%
By David Fickling

SYDNEY (MarketWatch) -- Shareholder backing for Rio Tinto Ltd.'s US$4.0 billion bid for coking coal developer Riversdale Mining Ltd. (RIV.AU) has risen by nearly a percentage point to 35.89%, from 34.94% two days previously, Rio Tinto said Wednesday.

An offer of A$16.50 per share for the Mozambique-focused miner, an increase on Rio's initial A$16.00-a-share bid, was extended for three trading days Monday to April 6.

Rio said the extension would allow some investors to finalize the unwinding of equity swaps, or settle trades made on the Australian Securities Exchange before they can accept the offer.

Rio has previously said it would want to hold at least 50% of Riversdale shares before declaring the offer unconditional, but that may be made difficult by the combined 47% holding in the company owned by Tata Steel Ltd. and Cia. Siderurgica Nacional, and some investors have speculated that the miner may settle for a holding slightly below control.

0865

 

[bigdog]

http://www.reuters.com/article/2011/03/28/riversdale-rio-idUSL3E7ES02L20110328

UPDATE 1-Investors bet Rio Tinto will drop condition on Riversdale bid

Sun Mar 27, 2011 11:04pm EDT

* Rio Tinto reaches 40 percent holding in Riversdale

* Sweetened offer of A$16.50 a share due to expire on Monday

* If bid unconditional, passive funds would boost Rio's stake

* Riversdale shares down 0.1% at A$16.14 in flat market (Adds source, fund manager comments, share price)

MELBOURNE, March 28 (Reuters) - Investors are betting global miner Rio Tinto will settle for a minority stake in Africa-focused Riversdale Mining after its A$3.9 billion ($4 billion) takeover bid failed to secure control of the firm just hours away from the offer deadline.

As of early Monday, Rio Tinto had just under 40 percent of the Australia-listed coal miner, with no sign of Riversdale's two key shareholders, India's Tata Steel and Brazil's CSN , selling any of the 47 percent stake they hold.

With the two steel-makers sitting tight, investors speculated that Rio Tinto would not walk away, and instead drop the 50 percent condition on its sweetened offer of A$16.50 a share and leave the offer open a bit longer.

"It's going to be a tough ask to get to 50 (percent) in the next 24 hours, so they may roll the dice and go unconditional in the hope that they get plus-50, which doesn't look as though it's going to eventuate today," said Tim Schroeders, a portfolio manager at Pengana Capital, which owns shares in Rio Tinto.

If Rio Tinto goes unconditional, Riversdale's weighting in the benchmark S&P/ASX 200 index would be cut, which would prompt passive fund managers to tip in a further 6-7 percent, fund managers said. Passive fund managers track indices by matching their holdings to index weightings.

Riversdale shareholders were to receive A$16.50 a share if Rio Tinto reached more than 50 percent acceptances by 0800 GMT on Monday. Otherwise the offer was due to revert to A$16 a share, remaining open until April 6.

Riversdale's shares were trading roughly unchanged on Monday, at A$16.14, above the value of the original bid, indicating investors expect Rio Tinto to go ahead with the sweetened offer whether it gets to 50 percent or not.

One potential outcome is that Rio Tinto gains just over 50 percent control and buys out Tata and CSN's stakes in Riversdale at a later date, potentially at a lower price than the current offer if coal prices fall, sources familiar with the deal say.

Schroeders said ideally Rio Tinto would want to have at least 50 percent to put it in a stronger position to dictate decisions on capital spending and the timing of developments on Riversdale's Benga and Zambeze coking coal projects.

Tata and CSN could also tip in some of their shareholding to get Rio Tinto across the line, sources said, although this was a last-resort option as they did not want to lose their bargaining power.

Riversdale Chief Executive Steve Mallyon told Reuters this month the company would need to raise A$3 billion just to fund the first stage of the Zambeze project, if Rio walks away. [ID:nL3E7E931N]

Rio Tinto was likely to make an announcement to the market on the offer early Tuesday, sources added

1008

 

[bigdog]

TRADING HALT

MInter Ellison letter included in the trading halt ann today
-- letter below
-- looks like 50% may be reached!!

$16.50 paid if 50% reached, otherwide we may get $16.00 if RIO accepts less than 50%

http://www.asx.com.au/asxpdf/20110329/pdf/41xq5932td5ln2.pdf

 

[bigdog]

http://www.businessday.com.au/business/rio-cuts-conditionality-on-riversdale-bid-20110329-1cdxi.html

Rio cuts conditionality on Riversdale bid
March 29, 2011 - 4:39PM

Rio Tinto has lowered the acceptance condition on its $3.9 billion offer for Riversdale Mining, after entering into talks with Brazil's CSN, a major Riversdale shareholder.

Rio Tinto's offer of $16.50 a share is now conditional on securing a minimum 47 per cent of Riversdale shares by April 6, the bidder said.

If it fails to reach the new threshold, Rio Tinto will pay Riversdale shareholders only $16 a share.

Advertisement: Story continues below The offer, announced in December, was conditional on at least 50 per cent acceptances, but has so far secured only about 41 per cent in Rio Tinto's third major deal attempt since its badly timed $40 billion takeover of Alcan in 2007.

The mining giant did not indicate in a statement after market close whether talks with CSN and other major shareholder Tata were continuing.

Rio shares gained 45 cents to close at $82.28 after dropping as low as $81.35 this morning. Riversdale shares were in a trading halt pending an announcement about the takeover bid.

Rio Tinto's lawyer said in a letter released to the Australian stock exchange that Rio "genuinely believes that an outcome of those discussions is likely to emerge during the course of this morning". The letter was released by Riversdale.

CSN, Brazil's largest steelmaker, recently increased its Riversdale stake to 19.9 per cent but has said nothing publicly about how it views Rio's offer.

Neither CSN nor Tata want the offer to fail but both were reluctant to reduce their holdings because it would lessen their bargaining power to control coal supplies, sources say.

Analysts expect Riversdale's shares to slide if Rio Tinto walks away.

"If they don't do the deal, it starts to look like it'll be quite difficult to take over Riversdale. So any takeover premiums that were in the price might come out," said Chris Drew, an analyst at broker RBC Capital Markets. "You could see it back down to as low as $US12 - that's if Rio decides to walk away and not sit on the 40 per cent."

Tata Steel, the world's No.7 steelmaker, is a long-time shareholder in Riversdale and recently increased its stake in the Australia-listed company to 27 per cent.

It has a director on Riversdale's board who backed Rio Tinto's offer, without saying whether Tata would accept it.

Tata Steel managing director Heman Nerurkar told Reuters last month the company was mainly interested in securing coal supplies from Riversdale and was talking to Rio about a range of options.

The offer was due to revert to $16 a share and remain open until April 6 if Rio failed to reach a majority holding by Monday, March 28.

 

[bigdog]

http://www.skynews.com.au/businessnews/article.aspx?id=598046&vId=

Rio's Riversdale stake almost at target
Updated: 12:09, Wednesday April 6, 2011

Rio Tinto says its interest in Riversdale Mining has risen to 46.78 per cent, just shy of the target it has set for effective control of the coal producer ahead of tonight's deadline.

According to The Australian, Rio Tinto has offered $16.50 a share - valuing Riversdale at almost $4 billion - provided it has acceptances for more than 47 per cent of the shares by this evening.

The threshold would make Rio Tinto a larger stakeholder in the Africa-focused coal producer than Tata Steel and CSN combined.

But Rio Tinto says if it fails to reach the 47 per cent level, its offer price reverts to $16 a share.

An outright takeover has been frustrated by steel producers Tata Steel of India and CSN of Brazil, which increased their investments in Riversdale since the offer was made