Swiss-based mining company Glencore has launched a counterbid to acquire Rio Tinto’s coal assets in Australia, challenging a takeover offer made by Chinese government-controlled Yancoal Australia six months ago.
Glencore has announced that it is willing to pay $2.55bn for Rio Tinto’s unit Coal & Allied Industries.
In January this year, Yancoal had reached an agreement to acquire Coal & Allied Industries for up to $2.45bn in cash.
However, under the terms of the Yancoal deal, Rio Tinto was allowed to engage in negotiations or discussions with a third party if the company’s board determine that a competing proposal is a superior proposal.
The deal terms also says that that Rio Tinto must allow Yancoal with the chance to make a counter offer.
Glencore said that its proposal is only subject to regulatory conditions and has already secured an approval from the Japanese anti-trust authorities.
Acknowledging the receipt of a proposal from Glencore, Rio Tinto said in a statement: "The Rio Tinto board and management will give the proposal appropriate consideration and respond in due course."
On the other hand, China's Yancoal said that it has received Chinese regulatory approval for the acquisition, while also acknowledging the counterbid made by Glencore
Yancoal said: “If Rio Tinto determines that the Glencore Proposal is a superior proposal, Yancoal Australia will have a right to match or better that proposal.
“Further announcement will be made by the Company in accordance with the Listing Rules if it receives notification from Rio Tinto in relation to whether the Glencore Proposal constitutes a superior proposal under such provision (if any).”
Coal & Allied Industries unit owns and operates multiple, multi-seam open cut mines in the Hunter Valley region of New South Wales as well as export infrastructure.
It owns 67.6% stake in the Hunter Valley Operations mining complex, 80% interest in the Mount Thorley mine, 55.6% in the Warkworth mine and other undeveloped coal assets, including various landholdings.
The firm also has 36.5% stake in Port Waratah Coal Services, a coal export terminal located at the Port of Newcastle.
Image: Rio Tinto’s Mount Thorley Warkworth Mine in Australia. Photo: Copyright © 2016 Rio Tinto.