Glencore fights back, sweetens deal for Rio Tinto’s Australian coal assets

Miner and commodities trader Glencore (LON:GLEN) is not giving up on Rio Tinto PLC’s Australian coal assets and it has submitted an improved all-cash offer of $2.68 billion only a few days after its previous bid was rebuffed.

The Swiss firm not only is promising to pay all of the cash upfront instead of a portion in annual instalments, but has said it would hand Rio $225 million if the deal were to be blocked by regulators in China, Korea, Taiwan or Australia.

As an added bonus, it has offered to let Rio keep the cash flows from the business until the deal closes.

Glencore has coal mines adjacent to Rio’s operations in the Hunter Valley, and believes it can make substantial savings by joining the two businesses together.

Earlier this week, Rio Tinto dismissed a previous $2.55bn offer from Glencore for Coal & Allied, sticking with a lower offer from Chinese-backed Yancoal, its preferred buyer.

“We believe the Glencore offer satisfies the criteria for a ‘superior proposal’,” the company said in a statement.

Rio has until the end of Monday to respond to the offer.

More to come…

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