Riversdale board unanimously backs Rio Tinto's $3.9 bn bid

The board of Africa-focused coal miner Riversdale, including a representative from top shareholder Tata Steel, unanimously backed a USD 3.9 billion takeover offer from Rio Tinto, Riversdale said on Monday.

Riversdale, coveted for its coking coal projects in Mozambique, said it was unaware of any other takeover offers in the works, even as an Indian state consortium said it had deferred to January 27 a decision whether to make a bid.

"As of today, no superior proposal has been received by Riversdale and the company is not aware of any party having an intention to make such a proposal," Riversdale said in a statement after releasing its official response to Rio's bid.

While Tata Steel's representative on Riversdale's board backed Rio Tinto's offer, Riversadale said the vote was not an indication of Tata Steel's intention with its Riversdale stake.

When the deal was first announced in December, Tata's board representative NK Misra abstained from voting on the offer and Riversdale said the new vote was made in the capacity as a Riversdale board member.

Riversdale's shares last closed at A$16.31, just 1.9% above Rio's offer of A$16 a share, indicating investors do not expect a higher offer to emerge.

Riversdale's two biggest shareholders are steel makers who are primarily interested in locking in coking coal supplies. Tata Steel owns 24.2%, while Brazil's CSN owns 16.29%.

Riversdale's third-largest shareholder Passport Capital has been trimming its stake from 15.69% over the past few weeks, indicating it is prepared to sell into the offer, which is due to close on February 18.

Riversdale said talks with its Chinese shareholder Wuhan Iron & Steel Corp over acquiring a stake in the Zambeze coal project in Mozambique have been suspended while Rio's offer remains on the table.