Rattling Rio's cage at 2007 Alcan vote EGM

January 14, 2008

This Ben Sharples story in the Herald Sun on September 29, 2007, followed the Rio Tinto EGM approving the excessive $US40 billion takeover of Canadian company Alcan.

Rio Tinto shareholders have approved the giant miner's $43 billion takeover of Canadian aluminium producer Alcan. Rio is poised to become the world's largest aluminium producer after its shareholders voted in favour of the transaction yesterday at a meeting in Melbourne.

Rio's offer of $US101 ($A114.98) cash a share for the aluminium producer values Alcan at $US38.1 billion. Rio chairman Paul Skinner said the company was pleased with the strong endorsement from shareholders.

"The transaction will bring Rio Tinto a set of aluminium assets of the highest quality, which are competitively well-positioned and will transform our aluminium business into a world leader,'' he said.

"We are aiming to complete the transaction in the fourth quarter of 2007 and are working closely with various regulatory agencies to achieve that objective.''

Rio, which launched its bid for Alcan in July, has already received approval from the Canadian Competition Bureau, US anti-trust authorities and the Quebec Government.

The company still needs clearances from Australian authorities and the European Union. But not all shareholders were thrilled about the transaction.

The board came under fire from shareholder activist and crikey.com.au website contributor Stephen Mayne, who labelled the Alcan deal "commercially reckless''.

"Rio has decided to bet the bank on the most energy intensive business of all,'' Mr Mayne said. "I think you've made a major commercial blunder with this.''

Mr Skinner said the company was paying "a lot of money'' to acquire Alcan but that it was an "outstanding'' opportunity for Rio.

"Our economic evaluation of this proposal was carried out as rigorously as we always do,'' he said.

Speaking on the sidelines of the meeting, Rio chief executive Tom Albanese said a review into potential asset sales to help fund the Alcan deal would be conducted over the next few months.

"We talked about a review, which we will conduct over the next several months,'' he said. "We've never been specific as to what would be in there.''

Turning to iron ore, Mr Albanese said the market was tight with continued strong demand coming from the Asian sector.

Rio Tinto shares gained 77 to close at $108.22.

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Rattling Rio's cage at 2007 Alcan vote EGM

January 14, 2008

This Ben Sharples story in the Herald Sun on September 29, 2007, followed the Rio Tinto EGM approving the excessive $US40 billion takeover of Canadian company Alcan.