Riversdale expects big shareholders to back

By James Regan and Michael Smith

SYDNEY (BestGrowthStock) – Riversdale Mining (RIV.AX: ) expects a positive reaction from its major shareholders to a $3.9 billion takeover bid from Rio Tinto (RIO.AX: ) but has not yet heard formally whether they will accept the offer, a senior company executive said.

Riversdale Managing Director Steve Mallyon told Reuters its third largest shareholder, Passport Capital, had committed an unspecified number of its shares to a pre-bid agreement that gives Rio Tinto options over 14.9 percent of Riversdale’s stock.

“There has been no reaction either way although Passport has put some of its shares into the pre-bid agreement,” Mallyon told Reuters in an interview.

“I would think the reaction from CSN and Tata would be generally positive.”

India’s Tata Steel (TISC.BO: ), Brazilian steel group CSN (CSNA3.SA: ) and Passport Capital collectively own about 50 percent of Riversdale.

Rio Tinto earlier Thursday launched a friendly $3.9 billion takeover for Riversdale, which is developing coal mines in Mozambique. It needs acceptances from 50 percent of Riversdale shareholders to get the deal through.

Mallyon said that Riversdale had held discussions with a number of parties on potential partnerships but was not in takeover discussions with any other party besides Rio.

He said agreeing to a Rio Tinto bid, it had to keep in mind concerns by the Mozambique government that any newcomer would meet the developing country’s economic and social requirements.

“We are a guest in Mozambique and it is very important for us that whoever comes in is totally compatible with the Mozambique government,” he said.

He said a 5 percent interest in Riversdale’s main Benga project had been set aside for the Mozambique government which is funding its stake with the help of international lenders.

(editing by Balazs Koranyi)

Riversdale expects big shareholders to back