talk of rival riversdale bid revived

Talk of rival Riversdale bid revived

WITH Riversdale Mining shares trading at Rio Tinto's offer price of $16, it seems investors are not hopeful of a rival bid.

But some are wondering whether stronger-than-usual volumes in the stock late last week and early this week may signal the entry of a new player to spoil Rio's first major acquisition since its $US38 billion takeover of Alcan in 2007. The trading in the stock has been dominated by UBS, Hartleys and Morgan Stanley in the past week or so and the speculation is a foreign buyer has built up a stake of about 3 per cent in the coalminer.

While a number of parties ran the ruler over Riversdale before the company struck its takeover agreement with Rio in late December, Rio's was the best offer. Last week, Indian state-owned consortium IVCL said it had decided not to bid, after discussing issues such as pricing and resource availability.

Riversdale controls an undeveloped coking coal resource in Mozambique. It is effectively controlled by two steelmakers: Tata Steel from India, with a 24.4 per cent stake, and Brazil's CSN, with 13 per cent. It has been pointed out before that these two shareholders are more strategic in their investment goals.

They could welcome Rio, given the Anglo-Australian mining giant's involvement could speed up development of Riversdale's project. Alternatively, they may use their shareholdings to make life difficult for Rio. More than 80 per cent of shareholders would need to accept for Rio to gain control, if Tata and CSN did nothing.

http://www.theaustralian.com.au/business/opinion/qbe-may-pull-off-1bn-deal-without-raising/story-fn7rgef9-1225999789508