 has submitted a $2.55 billion rival bid for Rio Tinto Group's Australian coal assets, $100 million more than the previous offer.){kind=link}
Glencore (LON:GLEN) has submitted a $2.55 billion rival bid for Rio Tinto Group’s Australian coal assets.
The counter-offer, which is $100 million more than the amount submitted by China-backed Yancoal Australia (ASX:YAL), throws into doubt the planned takeover that was expected.
Back in January Rio Tinto announced it was selling its Australian subsidiary to Yalcoal Australia, which is majority controlled by China’s Yanzhoa Coal, for $2.45 billion.
In light of the lucrative counter-offer, Rio Tinto said in a statement that they plan to review the offer. On Saturday, the company said the board and management would “give the proposal appropriate consideration and respond in due course”.
Anglo-Australian mining company Glencore already has a presence nearby in South Wales, Australia, but sees this latest move as a way to significantly cut expenses for the long term.
“The addition of the Coal & Allied assets to our existing portfolio in the Hunter Valley would unlock large-scale mining and operating synergies,” Glencore said in a statement on Friday.
Moreover, in their statement the company highlighted that their offer is fully funded, unlike the agreement originally negotiated by Yancoal, making it a “superior” bid.
“The Glencore proposal is fully funded and is not subject to any funding condition or termination right. By contrast, Yancoal has the right to terminate the Yancoal deal if it is unable to raise the funding, and its funding remains outstanding,” Glencore’s statement read.
The Chinese miner Yancoal has yet to raise financing to complete the scheduled deal with Rio Tinto, as it currently stands.
The proposed Glencore acquisition is subject to Australian regulatory approval.
Yancoal has already been confirmation for the go-ahead with its deal by Australia’s Foreign Investment Review Board. In addtion, Yancoal has the right to match the rival offer according to the terms of the original deal.
Shares in Glencore are down modestly by 0.71 percent as of 13.18PM (GMT).