[miningmx.com] — RIO Tinto and Mitsubishi Corp have made an offer to buy out Coal & Allied for A$1.49bn ($1.56bn), looking to take full control of the Australian coal miner to capture soaring coal prices.
Rio and Mitsubishi offered A$122 a share, a 34% premium to the coal miner’s last trade, to buy out the 14% they do not already own.
If successful, Rio Tinto would end up with an 80% stake and Mitsubishi with 20% in a bid that values the target at $11.1bn.
Coal & Allied said the offer was incomplete and was not capable of being accepted.
“We will be carefully considering the indicative proposal but at this stage have not formed any views in relation to either whether a shareholder meeting will be convened, or, more generally, the indicative proposal, including price,” said Bryan Davis, chairperson of Coal & Allied’s proposal response committee.
However Coal & Allied’s top institutional shareholder, Perpetual , has backed the offer, Rio Tinto said.
While the offer was at a 34% premium, it is well below Coal & Allied’s high of A$135 a share in January.
Rio and Mitsubishi still need to finalise their agreement to enter into a joint bid.
Rio Tinto was not immediately available for comment on why the company decided to bid now, when global markets are in turmoil.
