MINTER Ellison and Gilbert + Tobin have acted on Rio Tinto’s proposed takeover of Riversdale Mining as both companies wait to see whether a rival will top the offer.
Rio Tinto and Riversdale Mining entered into a Bid Implementation Agreement for a cash offer by Rio Tinto to acquire all of the issued shares of Riversdale by way of a recommended off-market takeover offer.
The Riversdale directors have recommended, in the absence of a superior offer, that shareholders accept Rio Tinto’s Offer and have indicated they intend to accept the Offer for shares in Riversdale which they control.
The Rio Tinto offer price of A$16 per share values Riversdale at approximately A$3.8 billion. The Offer price represents a 28.2 per cent premium to the volume weighted average price of Riversdale shares over the 30 trading days up to and including 3 December 2010 (the last day prior to the announcement of Riversdale’s discussions with Rio Tinto in relation to a possible corporate transaction) and a 37 per cent premium to the VWAP of Riversdale’s shares over the 60 trading days up to and including 3 December 2010.
However, Riversdale Mining’s second-biggest shareholder, Passport Capital, has today sold down about 1 per cent of its stake in the market. One of three major Riversdale shareholders, passport yesterday revealed its holding had slipped as the shares traded slightly above Rio’s offer price of $16 per share. On Thursday, Riversdale shares rose to 7c to $16.53.
Rio Tinto’s offer will be financed through its existing cash reserves and credit facilities.
In aggregate, Rio Tinto has secured pre-bid agreements in relation to 14.9 per cent of Riversdale’s current shares on issue, the maximum amount Rio Tinto may have a relevant interest in without approval from the Foreign Investment Review Board.
Minter Ellison advised Rio Tinto in relation to the takeover including merger terms, pre-bid agreements, strategy, due diligence investigations and bid implementation.
Costas Condoleon in Sydney and Simon Scott in Brisbane lead the Minters team.
Gilbert + Tobin acted for Riversdale, lead by Garry Besson.
“We have thoroughly enjoyed digging deep with Rio Tinto's senior management team and financial advisers on this takeover to help Rio Tinto pursue its growth strategy of investing in, developing and operating large, long term, cost-competitive mines and businesses driven by the quality of each opportunity,” Condoleon said.