De Beers increases Ashton offer in move to shut out Rio Tinto

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De Beers moved closer yesterday to securing part of the world's biggest diamond mine, Argyle, after raising its offer for Ashton Mining by A$223 (£85m) to A$745m, trumping Rio Tinto's rival bid.

De Beers moved closer yesterday to securing part of the world's biggest diamond mine, Argyle, after raising its offer for Ashton Mining by A$223 (£85m) to A$745m, trumping Rio Tinto's rival bid.

De Beers raised its offer for Ashton, which owns 40 per cent of Argyle, to A$2.28 a share, 23 per cent up on the A$612.4m offer by Rio Tinto, which owns the rest of Argyle. Ashton shares rose 18 per cent to A$2.35.

Ashton's board recommended that shareholders accept De Beers' new bid in the absence of a higher offer. Malaysia Mining, which owns half of Ashton, yesterday said it had accepted the revised De Beers bid, despite an independent report by KPMG Corporate Finance valuing Ashton at about A$870m.

De Beers wants to secure Ashton's stake in Argyle to expand its range. Argyle produces smaller gems supplied to the Indian market and diamonds used in cheaper jewellery sold in the United States.

David Bird, an analyst at ABN Amro, said: "I think De Beers' new bid puts Ashton out of reach for Rio. De Beers have exploration synergies with Ashton and it compliments their range of diamonds."

Rio Tinto, the world's second-biggest miner, is yet to respond. "Rio Tinto has noted De Beers counter-bid for Ashton Mining and will respond in due course," the company said in a statement. Rio Tinto shares fell 31p to 1,002p.

De Beers, which controls 60 per cent of the world's diamond mines, this week failed to stop Rio Tinto issuing a supplementary bidder's statement for Ashton, which it claimed was "inaccurate and misleading".

Malaysia Mining had offered to sell both De Beers and Rio stakes in Ashton of 19.9 per cent each, with the rest to be sold to the highest bidder.

In August Rio won a A$3bn takeover battle for North, an Australian iron ore producer.

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