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MELBOURNE — Mining giant Rio Tinto is one step closer to a takeover of Riversdale Mining Ltd. after increasing its offer, valuing the coal miner and its African operations at $3.9 billion.
The directors of Riversdale are recommending shareholders accept Rio's offer of Australian dollars 16 ($16) a share, up from the previous proposal of $15 a share. Riversdale shares last traded at $16.30.
The takeover would be Rio Tinto's first major acquisition since its $38.1 billion takeover of Alcan in 2007, which left the world's third-largest mining company struggling with massive debt.
Doug Ritchie, chief executive of Rio Tinto's energy division, said the acquisition fits Rio's strategy of investing in large, long term, cost-competitive mines.
"Rio Tinto's extensive experience in infrastructure and large project development combined with our significant financial capacity means that we are well placed to take Riversdale's asset base through its next phase of development," Ritchie said in the statement.
He said the takeover also highlighted Rio's commitment to Africa.
Riversdale is 24 percent owned by India's Tata Steel, which also has a 35 percent stake in Riversdale's Benga coal mine in Mozambique. Benga is projected to produce 20 million tons per year of coal by 2013.
Riversdale owns another major project in Mozambique and controls the Zululand Anthracite operation in South Africa.
