Rio Tinto and Mitsubishi are willing to shell out $1.5 million for the remaining minority shares in Coal & Allied. It is proposed that the joint venture partners will acquire all of the shares in Coal & Allied that they do not currently own.
Under the proposed scheme, Coal & Allied shareholders will receive cash consideration of A$125 per share, a A$3 increase when compared to consideration of A$122 per share announced by Rio and Mitsubishi on August 8.
The Coal & Allied board of directors formed to consider the initial proposal from Rio Tinto unanimously recommends that shareholders vote in favour of the proposed Scheme, subject to an independent expert concluding and no superior proposal.
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The proposal is subject to Coal & Allied obtaining a ruling from the Australian Taxation Office, Coal & Allied will announce a fully franked special dividend of A$8 per share. To the extent that any special dividend is paid, the consideration paid by the bid vehicle, Hunter Valley Resources to Coal & Allied shareholders will be reduced accordingly, Rio Tinto said.
If the proposal is successful, the interests in Coal & Allied held by Rio Tinto and Mitsubishi Development will increase to 80 per cent and 20 per cent respectively. Rio Tinto currently owns 75.7 per cent of Coal & Allied and Mitsubishi Development currently owns 10.2 per cent of Coal & Allied.
Documentation is scheduled to be lodged with ASIC and sent to shareholders in October.