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Riversdale announces a recommended takeover offer by Rio Tinto

Oilfield Technology,

Rio Tinto Group and Riversdale Mining Ltd have announced that they have entered into a Bid Implementation Agreement (BIA) for a cash offer by Rio Tinto to acquire all of the issued and outstanding shares of Riversdale by way of a recommended off-market takeover offer.

The offer price of AU$ 16/share values Riversdale at approximately AU$ 3.9 billion. It will be financed through Rio Tinto’s existing cash reserves and credit facilities.

The Riversdale Directors have recommended, in the absence of a superior proposal, that shareholders accept Rio Tinto’s offer and have indicated they intend to accept the offer for shares in Riversdale that they control. Riversdale’s executive chairman, Michael O’Keeffe, managing director, Steve Mallyon, and chief financial officer, Niall Lenahan, have entered into pre-bid agreements in relation to shares in which they have a relevant interest.

In aggregate, Rio Tinto has secured pre-bid agreements in relation to 14.9% of Riversdale’s current shares on issue. Doug Ritchie, Rio Tinto chief executive Energy said: “The acquisition of Riversdale is in line with our growth strategy of investing in, developing and operating large, long-term, cost-competitive mines and businesses driven by the quality of each opportunity.”

Ritchie believes that Rio Tinto is well placed to take Riversdale’s asset base through its next phase of development. “We believe Rio Tinto is one of the few groups in the world with the capabilities, values and incentives to develop the projects quickly and to a world-class standard, bringing considerable benefit to the people of Mozambique.”

Ritchie continued: “This investment underlines Rio Tinto’s commitment to Africa. Our reach extends beyond our operating mines to include an extensive exploration programme and numerous active projects in the region.”

The offer is subject to a number of conditions including Rio Tinto acquiring a relevant interest in excess of 50% in Riversdale, Foreign Investment Review Board approval, as well as no material adverse change occurring and Riversdale conducting its business within certain specified parameters.

The BIA also contains customary deal protection mechanisms including “no shop” and “no talk” restrictions and a matching right for Rio Tinto in the event of a competing proposal. A break fee of AU$ 37.8 million is also payable to Rio Tinto in certain circumstances.

Rio Tinto and Riversdale expect to dispatch the bidder’s statement and target’s statement in relation to the offer in January 2011.

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