Tata Steel ups stake in Riversdale to 27.14%

The World's largest mining firm Rio Tinto has put in AUD 3.9 billion bid for buying out Riversdale.

Tata Steel, Riversdale's largest shareholder, has upped its stake in the company between February 28 to March 1, Riversdale said in a filing to the Australian Stock Exchange yesterday.

The filing added that Tata Steel now has over 6.42 crore shares, amounting to 27.14% stake in the company.

In January, the Riversdale Board had approved a takeover bid of Rio Tinto for AUD 16 per share, in the absence of any other 'superior bid', making the bid value at AUD 3.9 billion.

Industry sources said that the move bolsters Tata Steel's position at the bargaining table and makes its clear that the Indian firm is more interested in getting coal rather than making a quick gain.

Tata's move follows a similar one made by Brazilian steel maker Companhia Siderurgica Nacional (CSN), which had recently increased its stake in Riversdale to 19.9%.

Both the companies together hold over 47 per cent stake in the Australian firm, making the job difficult for Rio Tinto to take over Riversdale, which has about 13 billion tonnes of rich coking and thermal coal reserves in Mozambique.

On the other hand, Rio had said last month that it holds just 16.99% in Riversdale and extended its offer by one month to March 18.