Rio Tinto has just fallen short of effective control of Riversdale Mining.
When its offer closed last night, Rio said it had 49.49% of Riversdale, more than its 47% target, and just over half a per cent less than what would have given it control.
To try and grab the rest, Rio has extended the closing date for the offer by two weeks to April 20, which should be enough to get it over the line.
In fact it might not surprise to see the two big hold out shareholders, Tata Steel of India and CSN of Brazil, change their minds about the offer.
They have no leverage left and will be asked to contribute hundreds of millions of dollars to the big plans Rio has for Riversdale’s expansion.
Rio said that as a result of obtaining this level of acceptances, the offer would now be A$16.50 a share, which would value Riversdale at almost A$4 billion.
That higher price will be paid to accepting shareholders by April 13.
The deadline for the offer has been extended four times since it was first made in December, and was last week declared unconditional after Rio failed to secure a more than 50% stake in Riversdale as it had previously planned.
The outright takeover had been frustrated by Tata Steel and CSN, which increased their investments in Riversdale during the offer.
Rio’s interest is in Riversdale’s two major developing coking coal projects in an area of Mozambique believed by some companies to be home to a massive deposit of high-quality coal that may rival Australia’s Bowen Basin in Queensland. Coking coal is a key raw ingredient in making steel.
Officers at Brazil’s CSN last week said the company intends to keep its 19.9% investment in Riversdale as a "hedge" to cover part of its own coking coal needs.
Tata, in addition to its 27.1% shareholding, has signed an agreement for 40% of the coal produced by Riversdale’s Benga mine, which is scheduled to begin production this year, and has a director on Riversdale’s board who accepted Rio’s bid.
Tata will be effectively paying twice for its coal, to develop the mine and then buy it.
Rio shares fell 6c to $86.10 yesterday.
Travel agent Flight Centre has maintained its guidance for full year profit at the $220 million to $240 million range outlined in the company’s interim profit statement in February.
The company told an investment conference yesterday that reflected a 10% to 20% improvement on the prior year, with guidance not materially affected by the recent spate of natural disasters.
That’s different to the likes of Qantas, Virgin Blue and Air New Zealand which have all reported solid financial hits from the floods in Australia, the earthquake in New Zealand the triple disasters in Japan, as well as the overall impact of rising fuel costs.
In Australia, reasonably priced airfares and the strong Australian dollar had ensured international leisure travel remained strong while corporate travel was still performing well above last year, Brisbane-based Flight Centre said in a presentation.
In New Zealand the company said, "With good profits still being generated despite Christchurch earthquake (17 shops directly impacted and eight of these not expected to reopen) FLT contributed NZ$1m to reconstruction fund.”
In the UK, the company’s leisure and corporate divisions were performing better than the local market.
In the US, solid profits had been achieved in March but the company needed a solid fourth quarter to meet expectations on earnings before interest and tax.
Flight Centre said other operations which Include Hong Kong, China, Dubai and Singapore will all "have record results and all expected to be profitable at year-end".
The company’s shares rose 8c to $22.70.
