Rio Tinto in talks on $3.5 billion bid for Riversdale

MELBOURNE (BestGrowthStock) – Australia’s Riversdale Mining (RIV.AX: ) has received a tentative $3.5 billion takeover offer from global miner Rio Tinto (RIO.AX: ) (RIO.L: ) and is in talks for a deal, the target company said on Monday.

It confirmed media reports that Rio was offering around A$15 a share for Riversdale, which would value the group at A$3.5 billion ($3.48 billion), only a 6 percent premium on Riversdale’s close on December 3.

Rio Tinto earlier said it would not comment on market speculation.

A deal would mark Rio Tinto’s first significant acquisition since its badly timed $38 billion takeover of Alcan at the height of the commodities boom in 2007, which forced it to sell more than $13 billion worth of assets to help slash debt.

Rio Tinto said last week it was on the hunt for small to medium-sized acquisitions worth around mid-single-digit billions of dollars.

(Reporting by Sonali Paul; Editing by Mark Bendeich)

Rio Tinto in talks on $3.5 billion bid for Riversdale