SYDNEY: India's Tata Steel , the world's No. 7 steelmaker, has raised its stake in Riversdale Mining to more than 27 percent, making it harder for miner Rio Tinto to seal its $3.9 billion bid for the Mozambique-focused coal miner.
Riversdale's shares fell 2.8 percent On Wednesday, valuing the group 6 percent below Rio's offer, indicating growing doubts that the deal will go ahead.
Tata Steel, already Riversdale's biggest shareholder, spent more than A$100 million ($101 million) upping its stake in Riversdale to 27.1 percent from 24.2 percent, according to a shareholder notice, confirming what sources had told Reuters.
Riversdale's second-largest shareholder, top Brazilian steelmaker CSN , also recently increased its stake in the Australia-listed company to 19.9 percent.
Tata and CSN now own 47 percent of Riversdale, making it extremely difficult for Rio to secure the 50.1 percent acceptances it wants before going ahead with the deal. Rio now needs almost 100 percent acceptances from minority shareholders and has so far won over just 17 percent of the company.
Rio spokesmen were not immediately available for comment on where its offer of A$16 a share now stands.
Rio last month extended the offer deadline to March 14 after Tata Steel said it had yet to decide whether to hold or sell its stake.
Tata Steel Managing Director Hemant Nerurkar told Reuters last month the company was mainly interested in securing coking coal from Riversdale for its steel mills and was talking to Rio about a range of options.
Tata already has a stake in Riversdale's Benga coking coal project in Mozambique.
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