Riversdale Chairman to quit, Rio Tinto gets 3 directors on board

MELBOURNE/NEW DELHI: Australian mining firm Riversdale on Thursday said three nominees of global mining giant Rio Tinto have joined its board as directors, while the company chairman and one director plan to resign. Since December, the Australian firm has been a takeover target for Rio Tinto, which has acquired 49.53% participating interest in the company so far, a Rio filing to the Australian Stock Exchange said.

Tata Steel and Brazilian steel maker Companhia Siderurgica Nacional (CSN) are the other largest shareholders in Riversdale, with stakes of 27.14% and 19.9%, respectively. According to a Riversdale statement, its Executive Chairman, Michael O'Keeffe, and Non-executive Director Andrew Love will resign as soon as Rio acquires more than a 50% stake in company or its offer period for the bid closes on April 20.

The statement added that three senior executives of Rio Tinto - Douglas Ritchie, David Peever and Matthew Coulter - have joined the Riversdale Board, taking the total number of board members to nine.

However, the Rio nominees will not take part in any decisions of Riversdale that relate to the global mining giant's takeover bid until after the end of the offer period (April 20), it stated. Yesterday, Rio Tinto had said that it had secured a 49.49% stake in Riversdale and had extended the offer till April 20 to secure an over 50% stake in the target firm.

The global mining giant had also agreed to pay A$16.50 a share to Riversdale shareholders, as it had exceeded its target of acquiring a 47 per cent stake in the company. The initial bid of Rio, submitted in last December, was A$16 a share.

The Riversdale statement also said "its board unanimously recommends that its shareholders accept Rio's offer in the absence of a superior proposal." On March 29, Rio had dropped its minimum acceptance condition of acquiring more than a 50% stake in the Australian mining firm and had said that its new target is to acquire an over 47% stake in Riversdale.