Rio Tinto and Mitsubishi have offered to buy out the smaller shareholders in Australia's Coal & Allied Industries for A$1.5bn (£948m) in the latest sign of consolidation in the international mining sector.
The proposal comes amid sharp falls across global stock markets that wiped more than 10 per cent off the price of Coal & Allied's shares last week. Rio and Mitsubishi, which together own about 86 per cent of the business, are offering A$122 per share, a 34 per cent premium to Friday's closing price.
Rio said the bid had the backing of Perpetual Investments, which owns about 6 per cent of the company, indicating that the move was likely to succeed. "Rio and Mitsubishi are the only potential buyers of this asset," Perpetual said.
The offer follows a string of big-ticket deals involving coal companies, including Rio's $4bn takeover of Riversdale Mining, the Mozambique-focused coal business.
More recently, Arcelor Mittal, in concert with Peabody Energy, turned hostile in their $5bn gambit to buy Australia's Macarthur Coal.