Rio ups North bid by 25% to £1.17bn

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The Independent Online

The battle for North, the Australian iron-ore producer, intensified yesterday when Rio Tinto, the British-listed mining giant, raised its bid by 25 per cent, valuing the company at A$2.99bn (£1.17bn).

The battle for North, the Australian iron-ore producer, intensified yesterday when Rio Tinto, the British-listed mining giant, raised its bid by 25 per cent, valuing the company at A$2.99bn (£1.17bn).

But analysts said rival bidder Anglo American, whose A$4.20 offer was recommended by North's board, might yet trump Rio's increased bid of A$4.75 a share. Last night, Anglo was considering its position.

Rio also announced a 33 per cent increase to $677m in pre-tax profit for the half year to 30 June, but saw shares drop 33p to £10.38. Robert Wilson, chairman, said the offer, up from A$3.80 a share, would mean sacrificing half of the A$400m it wants to save by controlling North's Australian iron-ore assets.

North shares closed up 14 cents at A$4.61 on rumours the bidding battle could go still higher. It is understood the group - known for extracting high levels of cost savings - is expected to up its price if the latest offer does not succeed, as much to shore up prices in the industry as to control North's assets.

The group is privately concerned by the relationship between Anglo and the Japanese steel industry, which buys 60 per cent of North's output and plays off the mining companies against each other.

Rio's new unconditional offer will be considered by North's board, which is expected to recommend it to shareholders.

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