Earlier on when the Rio Tinto offer was pitched ( for Riversdale mining) there were rumors of an Indian conglomerate also thinking of biding with sketchy details of who it was really that was doing the bidding in the news articles. Now it has emerged that TATA steel ( Indian Company )who is already a partner ( has 24 percent stake in riversdale mining) of Riversdale mining is also evaluating the deal that is on offer. Now when this sort of news is in the market Only two things can happen
1. The price of the share ( Riversdale Mining ) will go up and that can benefit Riversdale and its stake holders
2. Riversdale stake holders can reap a bigger price benefit due to this price surge
Will Riversdale price rise further , will the Rio Tinto takeover go through
If the Indian consortium decides to go ahead, it will have to up Rio Tinto's offer price of $16 per share for Mozambique-focused Riversdale.
Now this can be a good thing for Riversdale mining and its stake holders but possibly not for any bidders like Rio Tinto who possibly might be pressured into putting up a higher offer due to the price surge or then just news that is out that a rival is also “considering” an offer
Tata steel Takeover Document
Riversdale which is a Perth Western Australia based company has 13 billion tonnes in coking and thermal coal reserves in its Benga and Zambeze projects in the southern African country of Mozambique, will help the Indian companies secure coal supplies as currently there is a shortage in local production in india
Riversdale's major shareholders three investors owning about 51 per cent are shareholders, Tata Steel, Passport Capital LLC and Siderurgica Nacional SA. India’s Tata Steel holds a 24.2 percent stake as well as a 35 percent interest in Riversdale’s Benga project in Mozambique, where exports are scheduled to start next year
Earlier, International Coal Ventures ( Indian conglomerate)s aid it had hired Citibank to advise on a counter-bid to Rio Tinto's $16-a-share offer for Riversdale Mining.
"We have appointed Citibank. The merchant bank will submit its report in the next two weeks, based on which we will take a call on counter-bidding for Riversdale," chairman C.S. Verma said. ICVL is a joint venture between five state-run Indian companies -- Steel Authority of India ( also known as “SAIL” IN INDIA ), NTPC , NMDC, Rashtriya Ispat Nigam and Coal India.