Anglo-Australian miner Rio Tinto
While fund managers said the steelmakers may oppose Rio's offer, Riversdale managing director Steve Mallyon told Reuters he expected a positive response.
The company's third largest shareholder, U.S.-based fund Passport Capital, had committed an unspecified number of its shares to a pre-bid agreement that gives Rio Tinto options over 14.9 percent of Riversdale's stock, Mallyon said.
There has been no reaction either way although Passport has put some of its shares into the pre-bid agreement, Mallyon told Reuters. I would think the reaction from CSN and Tata would be generally positive.
Tata Steel, whose Riversdale board nominee abstained from voting on the bid, declined to comment.
Rio, which wants access to Riversdale's coking coal deposits in Mozambique, raised its offer to A$16 per share cash on Thursday from an earlier indicative bid of A$15.
Resuming trade after a two-day suspension, Riversdale shares closed up 1.7 percent at A$16.57, indicating investors were expecting a higher offer. Rio shares in London fell 1.0 percent by 1610 GMT, slightly underperforming a 0.6 percent dip in the British mining index <.FTNMX1770>
I think there is a strong potential (for rival bids), said Andrew Harrington, an analyst at Paterson Securities in Sydney.
There are not that many big new coking coal assets out there and this one is very large and it's near to production.
A group of state-run Indian firms, including NTSC
Let the report come, and then we will take a view, C.S. Verma, chairmain of Steel Authority of India
Verma was replying to a question on whether the consortium would consider any possible alliance with Tata Steel for a bid.
Other interested parties taking a look at Riversdale include Anglo American
Riversdale had held discussions with a number of parties on potential partnerships but was not in takeover talks with anyone else, Mallyon said, before heading to the beach after intensive negotiations to secure a deal with Rio ahead of the Christmas break.
I have got the board on the (car) roof. When I told everyone I was going to a board meeting it was not the kind they were thinking about. I am ready for a nice surf, he said.
Rio needs acceptances from 50 percent of Riversdale shareholders, which would require getting agreement from at least one of the three big shareholders that together own about half the company, according to Reuters data.
Riversdale's executive chairman and founder Michael O'Keeffe and Mallyon have offered their shares into the pre-bid agreement.
SURGING DEMAND, SOARING PRICES
Rio said the deal was in line with its strategy of developing large, long-life, low-cost assets. Riversdale may eventually supply 5-10 percent of the global market for coking coal, analysts say.
A 5 percent interest in Riversdale's main Bengal project had been set aside for Mozambique which is funding its stake with the help of international lenders, Riversdale said.
Rio's bid was just below Riversdale's last price at A$16.30 before trade was halted on Tuesday ahead of the announcement.
The offer was at a 24 percent premium to the one-month volume-weighted average price of Riversdale shares up until December 3, the last trading day before it said Rio may make a bid.
Riversdale shares have risen more than 130 percent this year, helped by takeover hopes and a boom in commodity prices fueled by soaring demand in China and India in particular.
A successful bid would cap a boom year for mergers and acquisitions involving Australian-listed companies. About $7.2 billion of deals involving Australian companies have been announced in the last three days as companies raced to complete transactions before Christmas.
Another coal miner Whitehaven Coal
The deal is a coup for Riversdale's O'Keeffe, who started out with MIMD Holdings, once Australia's largest copper and zinc miner and now owned by Xstrata. He later became managing director of Glencore Australia, holding the job for almost a decade before heading out on his own around 2004.
(Additional reporting by Narayanan Somasundaram and James Regan in SYDNEY, Rebekah Kebede in PERTH, Tanmaya Nanda in MUMBAI, SANJEEV CHOUDHARY in New Delhi and Eric Onstad in LONDON; Editing by Balazs Koranyi and Lincoln Feast)