Active Stocks
Fri Jun 21 2024 15:59:28
  1. Tata Steel share price
  2. 179.85 -1.37%
  1. ITC share price
  2. 419.60 -0.89%
  1. State Bank Of India share price
  2. 836.40 -0.88%
  1. Wipro share price
  2. 490.55 0.01%
  1. ICICI Bank share price
  2. 1,156.85 0.00%
Business News/ Companies / News/  Glencore abandons Rio Tinto bid, forcing six-month wait
BackBack

Glencore abandons Rio Tinto bid, forcing six-month wait

Glencore now barred, in most circumstances, from making renewed bid for six months under UK takeover code

Rio Tinto has said earlier on Tuesday that its board unanimously rejected an approach. Photo: BloombergPremium
Rio Tinto has said earlier on Tuesday that its board unanimously rejected an approach. Photo: Bloomberg

London:Glencore Plc abandoned a bid for Rio Tinto Group after a July offer to create the world’s largest miner was rebuffed.

Glencore is now barred, in most circumstances, from making a renewed bid for six months under the UK takeover code, the Baar, Switzerland-based company said in a statement on Tuesday. Rio Tinto has said earlier on Tuesday that its board unanimously rejected an approach.

An enforced wait before making another bid may improve Glencore chief executive officer (CEO) Ivan Glasenberg’s chances of an eventual deal. Rio Tinto gets about 80% of its sales from giant iron ore mines in Western Australia and the price of the commodity is falling, squeezing earnings.

“The pressure is on Rio now," Chris LaFemina, a mining analyst at Jefferies, LLC, said on Tuesday in a report. “If Rio management does not deliver material capital returns to shareholders, as promised, or if the iron ore price sharply falls next year, Rio could become much more vulnerable."

A deal would have been the industry’s largest and created the largest mining company worth more than $160 billion, usurping BHP Billiton Ltd.

Rio shares gave up earlier gains in London, trading up 2.1% at 3,060.5 pence at 3:29 am local time. Earlier, they had risen as much as 6.2%.

After being rebuffed by the board, Glencore has reached out to Rio’s biggest investor, Aluminium Corp. of China, to gauge its interest in a potential deal in the next year, according to people familiar with the matter.

Chinalco, as the state-owned company is known, controls about 9.8% of Rio, and talks took place in recent weeks, one of the people said, asking not to be identified as the details are private.

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore. Bloomberg

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 07 Oct 2014, 04:21 PM IST
Next Story footLogo
Recommended For You