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’Snap news
Breaking pre-market news on Friday,
- Rio Tinto extends Channar joint venture with Sinosteel; forms new JV with Chinalco for Chinese exploration — statement and statement.
- Premier Foods says Quorn sale talks at ‘an advanced stage with two parties’ — statement.
Another day, another Chinese resources deal Down Under
China certainly likes a good fight – and a good resources deal, as it is signalling yet again. One might think that the protracted, costly and ugly saga of the failed attempt by Chinese state-owned aluminimum group Chinalco for a $19.5bn investment in Rio Tinto – not to mention the subsequent detention of four Rio executives in Shanghai on spying allegations – would have been enough.
Rio employee held on suspicion of spying
Chinese officials have detained Stern Hu, Rio Tinto’s head of marketing and sales in China and an Australian citizen, on suspicion of espionage and stealing state secrets, a move that could stoke tension between the two countries,
The realpolitik of mining
From Reuters:
Global mining giant Rio Tinto said on Tuesday four of its employees in Shanghai had been detained by the Chinese authorities. “We aren’t confirming names … Rio Tinto is concerned about the employees’ wellbeing and is doing everything possible to help them and support their families,”
Rio’s rights issue sees strong demand
Rio Tinto’s $15.2bn rights offer, the fifth-biggest on record, on Thursday generated strong demand from UK investors who snapped up almost 97% of the 524m new shares offered in London at £14 per share – raising about £7.1bn,
A JV of a “strong monopolistic color”
Uh-oh.
From China Daily, citing the official Xinhua news agency:
On Monday, spokesman of the Ministry of Commerce Yao Jian said if the revenue of the joint venture reached “a certain amount,” China’s
Chinalco’s chief defends Rio bid
The chairman of Chinalco, China’s state aluminium producer, defended his company’s bid to double its stake in Rio Tinto, saying the collapse of the deal last week was “totally out of our control”.
Rio Tinto behaved like a “dishonourable woman”
That’s according to commentators writing for Xinhua, China’s state-backed news agency:
Of course, first of all, the break-up is Rio Tinto’s fault.
Rio Tinto is like a dishonourable woman: once she loved the money in Chinalco’s pocket but she actually did not love the man himself.
LEX on the Rio salvage job
Uncertainties remain over how the Chinese may respond to Rio’s cash call, Lex noted on Friday. And there’s still the little matter of competition approval. But some sort of Rio/BHP tie-up was always the logical path to take.
Chinalco out as Rio plans share sale
Rio Tinto announced on Friday that it will raise $15.2bn from a rights issue and share prized assets with rival BHP Billiton after Chinalco – the Chinese state-owned aluminium company – abandoned its controversial investment in the Australian miner.
Rio breaks with Chinalco; $12bn rights likely
The Chinese must be livid.
From Lina Saigol and colleagues at FT.com:
Chinalco is set to walk away from a $19.5bn deal with Rio Tinto following weeks of wrangling over the terms of the transaction in a dramatic U-turn that will shock the market.
Rio cuts ore price, says Chinalco deal ‘evolving’
The $19.5bn tie-up between global miner Rio Tinto and China’s state-owned Chinalco is an “evolving” deal and still subject to shareholder consultation, Rio’s iron ore chief Sam Walsh said Tuesday, reports Reuters.
Chinalco set to restructure Rio deal: SMH
Aluminium Corp of China, or Chinalco, China’s biggest aluminum producer, may take a smaller stake in Rio Tinto to win approval for its $19.5bn investment, reports Bloomberg, citing the Sydney Morning Herald .
BHP to underwrite Rio cash call?
UBS seems to think it could happen.
Our report of 29 April 2009 looked at what alternatives we believe are available for RIO shareholders to consider in lieu of the Chinalco deal. In this report, we look specifically at what BHP Billiton could do in response to the proposed Chinalco deal,
How news happens – Rio edition
We haven’t seen too many examples of this of late – the faceless (probably British, definitely long-only) institutional fund manager applying very public pressure on a major listed company board. Consider this report regarding Rio Tinto from Reuters:
Another reason to vote down the Rio/Chinalco deal
Here’s something that’s likely to anger shareholders in Rio Tinto.
It’s the pricing of a $1.5bn convertible bond launched by rival mining company Anglo American on Thursday.
The Bonds will be convertible into new ordinary shares of Anglo American plc (“Shares”) and will have a coupon of 4% per annum,
Investors braced for new wave of rights issues after HSBC success
Investors are braced for a wave of new capital raisings, following the completion of HSBC’s giant £12.5bn rights issue, the FT reported. The success of the offering, the biggest ever seen in the UK, frees underwriting capacity among banks and institutional investors,
Australia fires warning shot at China
It is a good job Rio Tinto has a plan B in case its proposed $19.5bn investment with China Chinalco is blocked.
It may well need it.
Here’s why – a statement from Australia’s Treasurer Wayne Swan, explaining his decision to block a’ $1.7bn bid for miner Oz Minerals from a Chinese metals group called Minmetals.
Rio shares rise on ‘Plan B’ talk
Rio Tinto shares jumped in Sydney trading on Friday after the miner said it had an alternative plan should its $19.5bn investment deal with Chinese aluminium group Chinalco fail, reports Bloomberg. Rio added 6% to A$58.21 after jumping 7.4% in London on Thursday after its CFO Guy Elliott said it may sell shares or bonds,
Regulator clears Chinalco’s Rio deal
Australia’s competition regulator has cleared Chinalco’s planned $19.5bn investment in Rio Tinto, ruling that the transaction was unlikely to “unilaterally decrease global iron ore prices below competitive levels”.
Rio picks newcomer as chairman
Rio Tinto on Tuesday named a relative newcomer in the mining industry as its new chairman as it tries to win over investors opposing its $19.5bn fundraising deal with Chinese miner Chinalco. Jan du Plessis,
Investors warn on Rio-Chinalco deal
Rio Tinto’s UK shareholders may act to raise the bar required for shareholder approval of Rio’s proposed deal for a $19.5bn investment from Chinese miner Chinalco, reports the FT. Steps could include tabling the proposed deal as a special resolution requiring 75% shareholder approval rather than a simple majority,
Snap news
Breaking pre-market news on Tuesday,
- Cattles says it will need to restate the group’s financial statements for 2006-2007, is in breach of covenants – statement
- HSBC HK selloff caused by “technical factors”;
Australian investors join Rio revolt
Australian investors in Rio Tinto have joined their UK counterparts in opposing a deal with Chinalco that could see the Chinese state-owned group double its stake in the Anglo-Australian miner to 18%, reports the FT.
Rio directors test waters
Rio Tinto’s independent directors are understood to have begun sounding out the miner’s top 20 UK shareholders to gauge their support for a multi-billion-pound rights issue, reports The Times. The directors are believed to be considering a climbdown over Rio’s controversial plan to raise $19.5bn from Chinese state-owned Chinalco after hostility from institutional investors.