Report: Blackstone preparing Rio Tinto bid
10 December 2007
Private equity group Blackstone, which is 30% owned by China's sovereign investment fund, CIC, is preparing to mount a bid for Anglo-Australian mining giant Rio Tinto, the Daily Telegraph reported. The report follows speculation that CIC and a consortium of Chinese steelmakers were planning to rival BHP Billiton's bid for the mining company, since denied by both CIC and leading Chinese steel firm Baosteel. SinoSteel Group recently proposed an acquisition contract to Australian iron ore mining company Midwest Corp, China Business Net
reported (in Chinese). SinoSteel offered the price of US$4.91 per share
to buy 100% of Midwest's stock, amounting to a total of US$1.05
billion. The offer is 16% higher than Midwest's market price before it
suspended trading on Friday, and almost 50% higher than competitor
Murchison Metals, an Australian iron ore explorer. The proposal was
incomplete, non-binding and subject to due diligence and other
conditions, according to Midwest. Analysts said SinoSteel's bid,
because of its smaller scale, would be likelier to succeed than a bid
for a much larger company such as Rio Tinto.