Mining giant, Rio Tinto plc (RIO) received clearance from Canadian Competition Bureau for its offer, to acquire all of the common shares of uranium company, Hathor Exploration Limited (“Hathor”) for C$4.70 in cash per common share.
The offer, made through an indirect wholly-owned Canadian subsidiary, received a “no action letter” from the Commissioner of Competition for the Hathor offer from Rio Tinto. The approval implies Rio’s compliance with each and every requirements of the Competition Act (Canada), moving it a step closer to a takeover.
On November 17, 2011, Rio Tinto increased its all-cash offer to acquire the outstanding common shares of Hathor for $4.70 per share. Rio’s revised offer valued Hathor at approximately C$654 million on a fully-diluted basis; which represented a premium to the unsolicited offer of C$4.50 per common share made on November 14, 2011 by rival bidder, Cameco Corporation.
The board of directors and financial advisor of the uranium company unanimously determined that the increased Rio Tinto offer is in the best interests of its shareholders. Thereafter it reaffirmed its support of Rio Tinto’s increased offer, which finally received clearance for acquisition of the shares of the owner of one of the world’s largest undeveloped uranium deposits, defeating the revised bid of Cameco Corp. (CCJ).
Headquartered in London, UK, Rio Tinto is engaged in exploring, mining and processing of the earth’s mineral resources, producing a broad range of metals and minerals. The company competes against global mining giants like BHP Billiton Ltd. (BHP) and Vale S.A (VALE). Rio Tinto has extensive uranium mining experience worldwide and controls widespread operations in mining and manufacturing of alumina, aluminium, iron ore, diamonds and titanium dioxide in Canada, through the global headquarters of “Rio Tinto Alcan.”
In a separate story, Australian lower house announced approval of tax on profit for mining coal and iron ore in Australia, known as the Mineral Resource Rent Tax, (MRRT), which will be applied to all companies earning more than 75 million Australian dollars (US$73.7 million) in annual profits from coal or iron ore production.
Upon imposition, BHP Billiton Ltd., Rio Tinto Group, Xstrata and other iron-ore and coal producers, which negotiated the levy with the government earlier, are anticipated to face the burden of paying about A$11 billion ($10.8 billion) in extra charges in the first three years. The miners, however, have not commented on the issue as yet.
