Rio Tinto plcNYSE
Sep. 30, 2015, 3:52 AM
- Rio Tinto (NYSE:RIO) has agreed to sell its 40% stake in the the Bengalla coal mine in eastern Australia to New Hope (OTCPK:NHPEF) for $606M in a deal that could signal Rio's eventual exit from coal.
- Rio has also taken full control of its Coal & Allied subsidiary, which manages mines in the Hunter Valley region of Australia's New South Wales state, from Japan's Mitsubishi (OTCPK:MSBHF). The latter will swap its 20% holding in Coal & Allied for a 32.4% stake in the Hunter Valley operations.
- The transactions come amid soft demand for coal, oversupply and low prices. (PR)
- Rio's shares are +1.9% in London.
May 17, 2015, 10:45 AM
- Rio Tinto (NYSE:RIO) has hired Credit Suisse to find a buyer for Pacific Aluminium, a group of smelters in Australia and New Zealand.
- RIO hopes to sell the unwanted assets for $1B.
- After failing to sell PacAl in 2013, CEO Sam Walsh said: “The market was aware PacAl wasn’t going to sell... I am a realist. Let’s get on with life." Since then, the aluminum market has rebounded.
- PacAl's Ebitda rose to $524M in 2014 from $252M in 2013.
- Source: Financial Times
May 1, 2015, 11:49 AM
- Rio Tinto (RIO +1.3%) is prepared to look for an acquisition - its first since 2012 - if it can secure the right asset at the correct valuation and win investor backing, Morgan Stanley says after an analysts’ meeting this week with CFO Chris Lynch.
- As asset valuations get pushed lower, larger producers may be changing their attitude toward deals, according to Argo Investments; after Rio has moved to reduce its project budget to the lowest since 2010, cut spending and complete a $2B share buyback, investors may be more likely to accept acquisitions, the firm adds.
- Still, with lower prices forecast for many key commodities in oversupply and slowing demand in China, asset sales or de-mergers are more likely than acquisitions, Goldman Sachs believes.
Apr. 6, 2015, 12:45 PM
- A six-month moratorium on merger talks between miners Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Rio Tinto (NYSE:RIO) ends tomorrow, and WSJ reports that the divergence between prices for copper and iron ore are giving deal supporters fresh hope.
- Glencore shares have climbed more than 15% since mid-January while Rio’s have dipped 3%, as iron ore prices recently hit 10-year lows below $50/ton in a long decline from highs of $190/ton reached in 2011; copper prices, meanwhile, have rebounded by ~5% to slightly more than $6K/ton in the past month.
- "Sooner or later either [Rio is] going to have to back away from the volume growth strategy, or they’re going to have to face the prospect that their earnings are going to fall through the floor,” says Sanford C. Bernstein analyst Paul Gait, adding that If Rio’s earnings keep falling and its share price suffers, “they’re going to be vulnerable to Glencore."
- As recently as February, Rio CEO Sam Walsh said he was not interested in a deal with Glencore.
- Another take: Glencore held back from Rio by value after takeover rule expires
Apr. 2, 2015, 11:36 AM
- The shackles keeping Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg from grabbing control of Rio Tinto (NYSE:RIO) will be removed next week when a U.K. takeover rule barring a hostile offer expires, but recent share price moves are likely to keep Glasenberg's desires in check for now, Bloomberg reports.
- While both companies are weathering the commodity price rout, Glencore is down 15% since its approach was revealed in October, vs. a 6% drop in Rio, giving it a market value about £14B ($21B) more than its rival; as of yesterday, Glencore was valued at £37.1B vs. Rio's £51.6B.
Feb. 25, 2015, 2:45 AM
- Rio Tinto (NYSE:RIO) will not be taken over by rival Glencore (OTCPK:GLNCY) because there is no value in it for shareholders and regulators will never let it happen, announced Rio Tinto chief executive Sam Walsh.
- Rio snubbed a takeover approach from Glencore last August to create a $160B mining and trading giant, but Glencore never ruled out making a fresh attempt.
- Under U.K. rules, it could return with an offer from April onward.
- Previously: Glencore confirms it is no longer considering merger with Rio Tinto (Oct. 07 2014)
- Previously: Rio Tinto says it turned down Glencore merger idea in August (Oct. 06 2014)
Jan. 12, 2015, 7:14 PM
- Fission Uranium's (OTCQX:FCUUF) "truly phenomenal" resource estimate for its PLS deposit has rekindled takeover speculation about the company, and CEO Dev Randhawa says investment bankers already have set up a data room for potential bidders.
- Fission said late Friday the deposit contains an estimated 105.5M lbs. of uranium resources, with more than half of the resource comprised of a high-grade zone that could potentially be mined at very low costs; the discovery is smaller than Saskatchewan's McArthur River and Cigar Lake mines, analysts say it compares favorably to everything else in the province.
- Fission needs the help of a major company for actual development into a mine; Cameco (NYSE:CCJ), Rio Tinto (NYSE:RIO) and France Areva are sometimes mentioned, but since the discovery is shallow and could be mined as an open pit, the CEO thinks it may draw interest from more general buyers such as Teck Resources (NYSE:TCK) that have no history in the region.
Nov. 24, 2014, 6:28 PM
- Various hedge funds were told this month by a prominent London mining banker to prepare for an all-but-inevitable takeover of Rio Tinto (NYSE:RIO) by Glencore (OTCPK:GLCNF, OTCPK:GLNCY), Bloomberg reports.
- Former JPMorgan Chase dealmaker Ian Hannam, who now runs a boutique advisory firm, reportedly convened reps of more than 20 investors to share his views on the potential deal, perhaps intended in part to help position his firm to win a role in the transaction.
- Glencore said last month it had abandoned a bid for Rio after a July proposal worth ~$160B was rebuffed.
Oct. 10, 2014, 6:11 PM
- Rio Tinto (NYSE:RIO) may decide that its best defense against another takeover approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is buying the likes of Freeport McMoRan (NYSE:FCX) in a "classic kind of defensive move," Bernstein analyst Paul Gait speculates.
- While Rio is saying it’s better off going it alone, a deal for FCX could help it ward off any further advances from Glencore as well as provide a way to lessen its dependence on iron ore at a time when the metal is slumping, Gait says.
- FCX "fits all the criteria of an attractive takeout candidate and would make sense for... anyone looking to increase their copper exposure and getting some very high-margin energy assets at the same time,” BB&T's Garrett Nelson adds.
- FCX shares are now at their cheapest in more than 15 months relative to EBITDA.
Oct. 8, 2014, 10:30 AM
- With any hope of Glencore (OTCPK:GLCNF, OTCPK:GLNCY) buying Rio Tinto (NYSE:RIO) on hold for six months, Glencore could turn to other targets such as Fortescue Metals (OTCPK:FSUMF) or Rio could pursue a defensive deal with a company such as Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), Sanford Bernstein analyst Paul Gait speculates.
- In the past, “we have had that kind of one action precipitate a whole cascade of events that puts a number of other guys in play," Gait tells Bloomberg.
- On the other hand, Glencore's pursuit of Rio may not be over, Gait says, adding "the industrial logic and the strategic logic are compelling to the point of being overwhelming."
Oct. 7, 2014, 10:33 AM
- Rio Tinto (RIO -4.1%) drops sharply after Glencore (OTCPK:GLCNF, OTCPK:GLNCY) states it is no longer interested in pursuing a combination with Rio.
- Glencore says it will be subject to Rule 2.8 of the City Code on Takeovers and Mergers for six months in relation to Rio while reserving the right to make an offer in the future.
- Rio had said earlier that it rejected a Glencore bid in August and that no discussions are taking place.
Oct. 7, 2014, 8:26 AM
- Rio Tinto (NYSE:RIO) is up more than 5% in London trading after the miner said a deal with Glencore (OTCPK:GLCNF, OTCPK:GLNCY) was not in the best interests of shareholders, and there had been no contact between the companies since August.
- Analysts caution that investors may be jumping in too swiftly, seeing the potential value of a deal but overestimating the likelihood of an agreement being struck.
- Glencore has many reasons to chase Rio, and to not take the rejection in July as the final word, but the idea is less compelling for Rio, which sees itself as a specialist top-drawer miner with a marketing business attached, and views Glencore as the reverse.
- A formal bid could face regulatory concerns in Australia, where Rio mines most of its iron ore and has a listing on the country’s stock exchange.
- RIO -1% premarket after surging 9% in yesterday's trade.
Oct. 6, 2014, 7:17 PM
- Rio Tinto (NYSE:RIO) says it rejected an informal approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) about a potential merger in August and has had no further contact.
- Rio rose 9.1% in the session after a Bloomberg report around midday said Glencore had been laying the groundwork for a potential deal with Rio next year and has reached out to Rio’s biggest investor, Chinalco (NYSE:ACH), to gauge its interest in a deal.
- Clarkson Capital notes that while a strategic merger would make sense, it believes too many obstacles would need to be overcome for a deal to happen; also, Rio's ADR share price is down less than 10% YTD even as iron ore prices are down more than 40% (Briefing.com).
Oct. 6, 2014, 12:16 PM
- Rio Tinto (RIO +9.8%) skyrockets on a Bloomberg report that Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is laying the groundwork for a potential merger with the company in the next year that would create the world’s largest mining company.
- Glencore is said to have has reached out in recent weeks to Chinese state-backed Chinalco (NYSE:ACH), which is Rio’s largest shareholder with a ~9.8% stake, to gauge its interest in a potential deal.
- However, no talks are yet underway between the two companies, no formal offer has been made, and none is likely before the end of 2014.
Mar. 6, 2014, 6:37 PM
- Turquoise Hill Resources (TRQ) +4.1% AH on speculation from the Daily Mail that Rio Tinto (RIO) is preparing to bid ~$8/share for the outstanding 49.2% of the company it doesn't already own.
- Billionaire Robert Friedland holds 3% of TRQ is said to have been against selling out to RIO until recently.
- TRQ holds 66% of the massive Oyu Tolgoi copper and gold mine, but progress on the $6B second stage of the project has been held up by RIO’s inability to strike an agreement with the Mongolian government.
Oct. 25, 2013, 5:29 AM
- Rio Tinto (RIO) is reportedly in advanced negotiations to sell its 50.1% holding in a coal mine in Australia to Glencore Xstrata (GLCNF; GLNCY) and Japan's Sumitomo (SSUMY; SSUMF) for around $1B.
- Glencore Xstrata and Sumitomo would each buy half of Rio's stake in the Clermont mine in the state of Queensland. The deal could be signed today.
- The sale is part of Rio's strategy of divesting assets as it looks to cut debt that reached almost $19B last year.
- Update: The sale is confirmed for $1.015B.