20 Jun Rio Tinto prefers Yancoal to Glencore for Australian coal assets sale
The Rio Tinto board has reconfirmed its recommendation to accept Yancoal’s US$2.45 billion bid for its Hunter Valley coal mining division Coal & Allied, after Glencore made a counter offer.
Yancoal came back with improved terms which the board accepted, despite Glencore’s $2.55 billion bid offering $100 million more.
The Rio statement said it expected a faster completion timeframe on the Yancoal proposal and that it would be in the best interests of Rio Tinto and Coal & Allied shareholders and customers.
Rio Tinto chief executive J-S Jacques said “We believe Yancoal’s offer to purchase our thermal coal assets for $2.45 billion offers the best value and greater transaction certainty for shareholders.
“Yancoal’s revised offer is the most attractive because it removes the deferred payment structure, can meet the timeline we have set for the transaction, and has given us certainty regarding the outstanding regulatory approvals required.
“The sale of Coal & Allied will create outstanding value for shareholders and is consistent with our strategy of simplifying our portfolio to ensure the most effective use of our capital.”
Rio expects the transaction to be completed in the third quarter of 2017.