Mitsubishi could be Glencore deal blocker

YANCOAL has confirmed that Mitsubishi Development has accepted its binding offer to acquire its 32.4% interest in Rio Tino’s Hunter Valley Operations Joint Venture for US$710 million despite Glencore offering a rival bid.
Mitsubishi could be Glencore deal blocker Mitsubishi could be Glencore deal blocker Mitsubishi could be Glencore deal blocker Mitsubishi could be Glencore deal blocker Mitsubishi could be Glencore deal blocker

Lou Caruana

Mitsubishi said it had also agreed to grant Yancoal a call option to purchase its 28.9% interest in the Warkworth operation for $230 million.

This would bring Yancoal’s offer for Mitsubishi’s stake in both Warkworth and HVO to $940 million – $20 million higher than Glencore’s offer.

In Glencore’s bid for Rio Tinto’s majority owned Coal & Allied coal assets in New South Wales’ Hunter Valley, the company said it wanted to purchase Mitsubishi's 32.4% interest in the HVO JV and 28.898% interest in the Warkworth joint venture for US$920m cash conditional on completion of Glencore's acquisition of C&A from Rio Tinto, with $520 million being payable on completion and $100 million payable on the first four anniversaries of completion.

 “The Tag–along Offer fulfills Yancoal’s obligation to make a ‘tag-along offer’ to Mitsubishi under the sale and purchase agreement for Yancoal’s acquisition of 100% of the shares in Coal & Allied Industries Limited from wholly owned subsidiaries of Rio Tinto and the corresponding requirements of the Hunter Valley Operations Joint Venture Agreement,” Yancoal said in a statement.

“Yancoal and Mitsubishi are now subject to a binding agreement for Yancoal to acquire Mitsubishi’s 32.4% interest in the HVO JV. The Mitsubishi transaction is conditional on completion of the CNA transaction, as well as receipt of necessary regulatory approvals.”