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Bids, Mergers and Takeovers

Rio Tinto board backs Yancoal's offer for Coal & Allied

26 June 2017 14:55

Rio Tinto says it is recommending shareholders vote in favour of the sale of Coal & Allied Industries to Yancoal Australia, following the revised offer from Glencore (received on 23 June) and a revised offer from Yancoal (received on 25 June).

The Company added that Yancoal's most recent offer includes:

- Total consideration of $2.69bn, comprising $2.45bn in cash payable in full on completion, as well as $240m via unconditional guaranteed royalty payments of which $200m will be received before the end of 2018.

- An increased break fee amount provided by Yancoal's parent company, Yankuang, from $100m to $225m.

- The receipt or waiver of all regulatory approvals required to close the transaction.

The Company said its is recommending Yancoal's improved offer based on greater transaction certainty and higher net present value.

Rio Tinto chief executive J-S Jacques said:

"The revised offer from Yancoal of $2.69 billion offers compelling value to our shareholders for our Australian thermal coal assets. This sale process has been in progress for a long period of time and we believe it is in the best interests of our shareholders to take the greater certainty of Yancoal's strong proposal."

At 2:55pm: (LON:RIO) Rio Tinto PLC share price was +29.25p at 3081.75p

Story provided by StockMarketWire.com

Related Company: RIO

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