Riversdale agrees $3.9 billion Rio bid

Anglo-Australian miner Rio Tinto offered $3.9 billion to buy African-focused coal miner Riversdale in an agreed deal that is likely to be challenged by rivals seeking to secure coking coal reserves.
Rio's first big acquisition since its ill-timed Alcan buy in 2007 is a play on soaring Asian demand for the key steel-making ingredient, but needs the backing of at least one of Riversdale's three large shareholders, including India's Tata Steel and Brazilian steel group CSN.
While fund managers said the steelmakers may oppose Rio's offer, Riversdale managing director Steve Mallyon told Reuters he expected a positive response. The company's third largest shareholder, US-based fund 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, Mallyon said. "There has been no reaction either way although Passport has put some of its shares into the pre-bid agreement," Mallyon told Reuters. "I would think the reaction from CSN and Tata would be generally positive."