The Australian mining company Riversdale Mining Ltd (RML) announced Monday, January 24 that it has suspended negotiations with Chinese steel group Wuhan Iron and Steel Co., Ltd (WISCO) on the latter's takeover bid for the Zambeze coal mining project in Mozambique, which is now owned by Riversdale.
Riversdale said that it is now considering the offer from giant Australian miner Rio Tinto, which intends to purchase Riversdale for a consideration of AUD 3.9 billion ($3.86 billion). Riversdale stated that at present there are no other rival bidders with more competitive offers.
As SteelOrbis previously reported, towards the end of December last year Rio Tinto and Australian Stock Exchange-listed Riversdale entered into a ‘bid implementation agreement' for a cash offer through which Rio Tinto would acquire all of the issued and outstanding shares of Riversdale by way of a recommended off-market takeover offer.
Riversdale owns large coal mines in Mozambique and has become a target for global miners. Riversdale's assets include the Benga project and the neighbouring Zambeze project in Mozambique which have high quality coking coal.
The offer price of AU$16 (US$16.05) per share values Riversdale at approximately AU$3.9 billion (US$3.91 billion) and is up from the previous AU$15 offer. The offer will be financed through Rio Tinto's existing cash reserves and credit facilities.