Rio board unmoved by Glencore approach

Rio Tinto CEO Sam Walsh poses during a photo call to announce Rio Tinto's 2015 interim results in London. REUTERS/Neil Hall

Rio Tinto CEO Sam Walsh poses during a photo call to announce Rio Tinto's 2015 interim results in London. REUTERS/Neil Hall

Published Aug 6, 2015

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London - Rio Tinto Group remains steadfast in its opposition to a Glencore Plc takeover one year after it was approached by the commodity trader and mining company headed by billionaire Ivan Glasenberg.

The board hasn’t changed its view and shareholders “strongly support” the decision to rebuff the approach last August, Rio’s Chief Executive Officer Sam Walsh said at a press briefing in London on Thursday.

Rio rejected Glencore’s approach to merge the two businesses in a deal to create the world’s biggest mining company which at the time would have had a combined market value of more than $150 billion. Walsh said in December the two companies were “totally different” organizations.

“If you were to ask shareholders about it, if you ask investors about it, they just don’t believe that it’s going to happen or it would happen,” Walsh said. “At the time we made it clear it wasn’t something that was of interest to our board. We took that decision very seriously. I don’t believe that the board has changed its position in relation to that.”

The decision to rebuff Glencore’s approach was underpinned by the company’s successful strategy of reducing costs and paying out more cash to investors, Rio Chairman Jan du Plessis said in the October statement that confirmed the approach.

Rio itself isn’t looking at any acquisitions amid a slump in commodity prices that cut the company’s first-half profit 43 percent. It reported earnings earlier Thursday that exceeded analyst estimates.

“There’s nothing out there that excites us,” Walsh said. “In terms of shareholder position in relation to this, I think it comes back to the view of do you have the right processes in place to make decisions like that? There is nothing out there that would wildly excite me.”

Bloomberg

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