rio , page-2

Thanks FB. Thought I'd post the entire article:

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BREAKFAST DEALS: Rio tangles
Supratim Adhikari
Published 7:32 AM, 10 Mar 2011
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Rio Tinto finds itself involved in another complicated deal as the market bets on a full takeover bid from CGNPC for uranium miner Extract Resources. With the Chinese company looking to buy Extract?s major shareholder Kalahari Minerals there are some who reckon Rio could lob a bid of its own for Kalahari. Meanwhile, OZ Minerals' $250 million Carrapateena buy gets a mixed review, Japan?s Asahi mulls legal action against the ACCC, and more sabre rattling between Woodside and the East Timor government. Elsewhere, Whitehaven Coal loses a Korean suitor, US private equity firm Spectrum Equity Investors buys a stake in iSelect and a management shake up at Lend Lease.

Rio Tinto, Extract Resources, Kalahari Minerals, Riversdale Mining

Rio Tinto may be back in growth mode but it is making a habit of getting involved in complicated deals across the globe. First there was the legal argy bargy with Ivanhoe Mines with regards to their partnership in Mongolia, then there is the ongoing tussle for Riversdale Mining and complicated share registry and now the interesting situation with Extract Resources, Kalahari Minerals and its suitor China?s CGNPC Uranium Resources. Rio is hoping to merge its Rossing uranium mine with Extract?s neighbouring Husab uranium project, often touted as the largest undeveloped uranium deposit in the world. However, Extract?s major shareholder Kalahari, which holds a 43 per cent stake in the miner, is now facing a $US1.2 billion takeover offer from CGNPC and that could make things complicated. Extract shares have soared over $10.50 on the takeover news, and with the miner seen as the real motivation for CGNPC?s move on Kalahari it?s no surprise that Extract?s management has asked the Australian Securities and Investments Commission to ensure that the CGNPC offer is extended to its shareholders. CGNPC has asked for exemption from ASIC with regards to the takeover rule that would automatically force it to make an offer for the rest of Extract's shares if it gains control of Kalahari. However, Extract?s roaring share price would indicate that many expect the corporate regulator to vote against the Chinese entity. So where does Rio stand in all of this if CGNPC does choose to push through with its bid for Kalahari and Extract? Well for one thing, Rio holds a stake in both companies and can choose not to sell that to the Chinese. However, there is talk that the mining giant could counter CGNPC?s move by launching its own bid for Kalahari to acquire its stake in Extract and not have to launch an accompanying bid for Extract. Unlike CGNPC, Rio will have no trouble getting the takeover relief from ASIC. CGNPC has signalled that it may not proceed with its bid unless it gets the exemption from ASIC, but given its deep pockets and Husab?s promising prospects it may not be completely averse to wrapping up both Kalahari and Extract. It will be interesting to see how Rio reacts to that scenario but the miner does have a more immediate decision to make with regards to its $3.9 billion bid for Riversdale. The offer has already been extended twice and there is speculation that Rio may have to sweeten its offer to get Riversdale?s major shareholders on board. The whole affair is starting to look like Peabody?s failed tilt for Macarthur Coal last year. Peabody was stymied by one of the three major stakeholders in Macarthur and there are fears in some quarters that the same fate may await Rio.