Gina Rinehart’s Hancock Prospecting is after the 80.2 per cent of the Sydney-based Riversdale it does not already own.
Article by Sean Smith, The West Australian, February 27th
Gina Rinehart’s Hancock Prospecting has launched a potential $740 million buy-out of privately owned Australian coal explorer Riversdale Resources.
Hancock said today it was offering an initial $2.20 cash-a-share for the 80.2 per cent of the Sydney-based Riversdale it does not already own, but would add another 30¢ to the offer price once acceptances exceeded 50 per cent.
The success of the bid hinges on US private equity group Resource Capital Funds, which owns 48 per cent of Riversdale.
Three of the target’s founding shareholders — chairman Michael O’Keefe, chief financial officer Anthony Martin and former managing director Steve Mallyon, who stepped down just two weeks ago — have agreed to accept the offer for their cumulative 16.5 per cent of the company.
According to the bid documents, Hancock has more than $3 billion in cash reserves and was sounded out about an offer by Mr Mallyon.
The group, which has interests in iron ore, beef, coal and dairy, bought into Riversdale in August for a reported $68.9 million, with the cash going towards the early stage development of the latter’s flagship Grassy Mountain hard coking coal project in Canada.
Mr O’Keefe and Mr Mallyon set up Riversdale after their Mozambique coal group Riversdale Mining was controversially bought by Rio Tinto for nearly $US4 billion eight years ago.
Hancock said that at $2.50 a share, its offer would represent a 47 per cent premium to its buy-in price last year. It would see the group spend a maximum $598.9 million to buy out the outstanding shares and any new stock issued on conversion of Riversdale options.
