Rio Tinto’s rights offer has been a big success in the UK, with shareholders taking up 96.97% of the London shares offered, raising around 7.1 billion pounds.
Following this news, major shareholder Chinalco announced it would also take up its full entitlement.
The results of the Australian rights issue are not yet known.
The Rio share price was up this morning on market open:
ASX Code: RIO
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For more details on this news story:
Finance News Today
Chinalco, metals and mining, Rio rights issue, rio shareholders, Rio Tinto
Presented by Michael Hevern
MDSFinancial
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or
Click here to download the mp3 audio recording (988Kb).
General Advice Only
*************************************************
In this morning’s wrap…
DOW: down 1.5%
Deteriorating US Government Creditworthiness
NASDAQ: down 0.4%
Testing Support
FTSE: down 0.3%
S&P Downgrades UK Debt; Banks Weigh;
DAX down 2.7% & CAC down 2.4%
NIKKEI: up 0.6 %
Swine Flu Weighs on Retailers; BoJ May Raise Assessments (Jul’06)
Hang Seng down 1.6%;
Oil: down 1.5% ($61)
Profit Taking
US Inventories Down
Gold: up 1.7% ($943) – Risk Aversion
Commodities Lower;
USD Lower (4 month Lows)
SPI down 57 (1.5%)
SPI: Critical Level(s): 3800 to 3600
Swing Low
ASX News
• CWN – Q/Q $46m Loss; Rev slump 55% (Macau)
• RIO – months before Aus. Regulators decide
• STO – gets bids on gas projects off Darwin
• MAP – April traffic up; 2009 outlook grim
• MQG – revises remuneration scheme (Budget)
• Golds to support
• Materials, Financials and Energy to weigh
• ASX – to open down; US – suffers
Morning Wrap
ASX News, Business News, Chinalco, Commodities, Rio Tinto, stock market, stockmarket, technical analysis, trading
According to The Australian, Rio Tinto is now putting out feelers to institutional investors regarding replacing the controversial Chinalco bond issue with a capital raising, underwritten by Chinalco.
The change of heart seems to be a result of shareholder feedback, including the vocal UK institutional investors, and has brought Rio to the point of indicating to Chinalco that a change to parts of the $19.5 billion deal is necessary. Chinalco is thought to be resigned to some changes, though will not compromise on the arrangements giving it stakes in mining assets.
None of the report’s claims have been confirmed by either party, but the share price jumped up $2.62 yesterday.
ASX Code: RIO
Chart from the Market Analyser.
To read the full article in The Australian, click here.
Finance News Today
ASX News, bond issue, Business News, Capital Raising, Chinalco, RIO, rio shareholders, Rio Tinto
For anyone interested in the ongoing speculation about Rio Tinto’s plans, Malcolm Maiden has provided some new material today in his article for Fairfax.
Following Rio chief Jan du Plesssis’ Monday morning denial of having met with BHP chairman Don Argus, the pair did in fact meet up later that same day, according to this article.
While this could mean nothing at all, says Maiden, it could also mean a lot since Argus has been known to state that BHP would be a better partner for Rio than Chinalco.
In his first conference as Rio chairman, Jan du Plessis reaffirmed the company’s commitment to the Chinalco deal, and played down talk of a rights issue.
To read the full article, click here…
Codes for your watchlist:
- BHP Billiton: BHP.AX (ASX); BLT.L (London Stock Exchange); BHP.N (New York Stock Exchange)
- Rio Tinto: RIO.AX (ASX); RIO.L (LSE)
Finance News Today
ASX News, BHP Billiton, Business News, Chinalco, jan du plessis, mining companies, rio bhp, Rio rights issue, Rio Tinto
Presented by Michael Hevern
MDS Financial
Click here to watch the presentation.
or
Click here to download the mp3 audio recording (1273Kb).
General Advice Only
*************************************************
In this morning’s wrap…
DOW: up 0.5% – up 3.1% for week
Unemployment at 8.5%;
DJ Tranports up 7% for Week
NASDAQ: up 1.2% (up 5.5% for Week)
For Week: RIM up 32%; Apple up 9%
FTSE: down 2.3% (up 2.9% for Week)
UK Companies Most Profit Warnings Since 2001
DAX down 1.4% & CAC down 1.1%
NIKKEI: up 0.3%
China’s Stimulus Hope; Autos Down
Hang Seng up 0.2%
Oil: down 0.4% – At $52
Momentum Slowing
Gold: down 0.1% ($895)
Commodities Higher;
USD Lower
SPI up 33 (+0.9%);
SPI: Critical Levels: 4000 Next Key Level
ASX News
* FMG – AISC investigation (from late 2004)
* RIO – Plan B – $8bn capital raising
* MGX – resolves issues with customers
* RBA – Decision this week
* Energy & Golds to weigh
* Materials to recover
* Financials continued support
* ASX – to open higher – US – Higher despite unemployment
Morning Wrap
ASX News, Chinalco, commodities prices, finance markets, Rio Tinto, stockmarket, trading
Rio – Chinalco
- As Rio’s board of directors discusses the Chinalco alliance, only one Australian voice remains. Rod Eddington has chosen to stand aside from voting on this issue, due to a perceived conflict of interest.
- Shares were sold off yesterday, following concern that shareholder backlash could lead to a shakeup of board and management positions, according to a report in the Herald Sun.
- Rio is thought to be working on an arrangement to allow institutional investors access to bonds on similar terms to those offered to Chinalco, in an effort to appease the dissenting shareholders.
Fortescue Metals
- Trading has been halted while the company seeks to raise $500 million to fund the expansion of operations at its Pilbara iron ore mine. Investment is expected to come from institutional investors and Chinese steel group Hunan Valin.
OZ Minerals
- OZ has met the first of two conditions required for Minmetals to proceed with its takeover bid. The second condition, an agreement by OZ’s banks to a debt facility extension, is expected to be met by Friday.
- Unconfirmed rumours suggest OZ is planning to sell its Martabe gold project in Indonesia, and that BHP Billiton may bid for the Prominent Hill mine.
Further information:
Finance News Today
ASX, ASX News, Australian mining companies, BHO Billiton, Chinalco, Fortescue Metals, investors, Oz Minerals, Rio Tinto, share market, shareholder, stockmarket
Calls for the Brisbane Line to be re-established have reached Canberra with Australians demanding action to defend ourselves from the Chinese invasion.
First Rio, then Oz and now even the proudest of entrepreneurial Australians Twiggy, have succumbed to the Northern onslaught.
“What is the Government doing about it?” cried diggers whose only super salvation is demanding that the FIRB allow these acquisitions to occur.
“We’ll beat them by stealth just like we did the Japanese” said another. “We’ll let them invest, then collapse the market and get the country back for next to nothing. It worked in the ‘80s with property and we can do it again in resources”, the wily old timer declared.
As a last resort, it was suggested we reinstate the Brisbane Line and let the Chinese dig up anything north.
So Wayne Swann is now feeling the “Peter Garrett’s”, an Australian expression for dammed if you do and dammed if you don’t. He either allows the Chinese to invest and control some of Australia’s largest resources companies and deposits, boosting the local stock market and investors’ returns, or denies them and Australia gets the hurts by the Chinese turning their attention to other parts of the world, the markets collapse and our old diggers have a pittance to live on.
Oh to be a fly on the wall in cabinet.
TrikiRicky
Finance News Today
ASX, ASX News, Chinalco, Fortescue, investing, Oz Minerals, Rio Tinto, share trading, stockmarket
Chinese state-owned Minmetals has announced a $2.6 billion takeover offer for OZ Minerals.
Like the BHP – Chinalco deal, this will require federal government approval, so what are the considerations under review?
- Unlike the Rio deal, this would be a full takeover
- OZ is presenting the deal as a lifeline, and the only feasible alternative to receivership and the resulting implications for jobs, shareholder losses and growth projects
- The strategic importance of copper and zinc to Australia, arguably less important than the iron-ore Rio hopes to sell off
- The merits of the deal itself are complicated by external economic conditions
- National interest must be balanced with potential for a long-term strategic partnership with China
Traders and investors can again join in the action with OZ resuming trading today, after a halt called in November. Shares jumped up 29% this morning.
For your watchlist:
Further information:
Finance News Today
ASX, BHP, Chinalco, Commodities, investing, Oz Minerals, share market, share price, stock market, trading
Rio Tinto’s $30 billion deal with Chinalco has angered some shareholders and institutional investors.
Legal & General, a British based institutional investor and Rio’s second largest shareholder is leading the opposition.
Among the concerns:
- The deal overrides the pre-emption principle, which would give existing shareholders the first option to buy new shares
- Rio has agreed to sell assets and shares at a low price, in order to secure the deal
- Chinalco might use its new influence to provide China with cheaper supplies of raw materials
Some Rio Tinto shareholders are urging BHP to launch a second takeover bid for Rio, and institutional investors are promising to provide the finance in an effort to foil Rio’s Chinalco deal.
Stocks for your watchlist:
- BHP Billiton: BHP (ASX, New York Stock Exchange); BLT (London Stock Exchange)
- Rio Tinto: RIO (ASX, London Stock Exchange); RTP (New York Stock Exchange)
Further Information:
Finance News Today
ASX, BHP, Chinalco, investor, LSE, NYSE, RIO, share market, shareholder, stock market, trader
Rio Tinto has confirmed it is in negotiations to sell assets to state-owned Chinese aluminium company Chinalco.
Depending on whose report you read, the deal is thought to be worth $12.5 billion (The Australian and abc.net.au) or as much as $23.5 billion (The Age), and would provide Chinalco, already Rio’s main shareholder, with a strategic investment in Australian resources.
Some analysts are expecting there will be more of this type of activity to come; as the global economic downturn slashes the value of Australian mines, and mining companies are left floundering, there are more investment opportunities for China.
The additional stake in Rio would be limited under current foreign ownership guidelines, however a report in The Australian suggests the Rudd government may be considering a relaxation of the current limits.
Rio shares were up 6.88% this morning, while BHP fell 2.16%. Fortescue Metals also gained 9.04%.
Stocks for your watchlist:
Rio Tinto: RIO (ASX and LSE)
BHP Billiton: BHP (ASX), BLT (LSE)
Fortescue Metals: FMG (ASX)
Further Information:
- Reuters News Feed through the Market Analyser
Finance News Today
ASX, BHP, business, Chinalco, economy, finance, Fortescue, resources, RIO