Rio Tinto (ASX, LON:RIO) has dismissed Glencore’s (LON:GLEN) sweetened bid for the coal assets on the block in Australia's Hunter Valley and said it is sticking with an offer from Yancoal Australia (ASX:YAL), a subsidiary of China’s Yanzhou Coal Mining.
On Friday, the Swiss miner and commodities submitted a second and improved all-cash offer of $2.68 billion only a few days after its previous bid was rebuffed.
Glencore 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 cashflows from the business until the deal completes.
Glencore, led by billionaire Ivan Glasenberg, 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.
But Rio Tinto confirmed Monday that it would opt for Yancoal’s revised bid of $2.69bn, which includes at least $2.45bn in cash on completion.
More to come…
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