2nd UPDATE: Rio Tinto Wins Against Ivanhoe Mines' Poison Pill
13 Décembre 2011 - 8:30AM
Dow Jones News
Rio Tinto PLC (RIO) has been successful in its challenge of
certain provisions in a poison pill defense adopted by Canadian
mining concern Ivanhoe Mines Ltd. (IVN.T), following a ruling
Tuesday by an independent arbitrator.
The decision allows Rio to maintain its 49% stake if any bid for
Ivanhoe triggers the smaller company's shareholder rights plan
adopted last year, Ivanhoe said in a statement. It also frees Rio
to increase its stake beyond the 49% cap agreed between the
companies under a five-year-old pact due to expire Jan. 18,
something many analysts have said is likely at some point.
Ivanhoe is majority owner of the massive Oyu Tolgoi copper and
gold project in Mongolia, which founder and Chief Executive Robert
Friedland has said could become one of the world's largest mines
and a major driver of the small Asian country's economy for
decades.
"Rio Tinto is currently examining the decision but can confirm
an independent arbitrator has upheld our claim in respect of
Ivanhoe Mines' shareholder rights plan," a spokesman for the
Anglo-Australian company said in an emailed reply to questions.
Rio already is Ivanhoe's largest shareholder, having steadily
increased its holding over the past two years, and is manager of
the Oyu Tolgoi project. It also effectively controls the
Vancouver-based company's board, with three employees and four
nominees among the 14 directors.
The companies had turned to arbitration after Rio claimed the
so-called poison pill adopted by Ivanhoe's board in May 2010
breached its rights under a 2006 agreement between the
companies.
Ivanhoe said its shareholder rights plan can remain in effect
until April 2013, but if it is triggered it will be subject to
Rio's right to maintain the relative size of its holding if Ivanhoe
issues shares. Ivanhoe had argued the scheme was necessary to give
its board time to consider any bid and to explore alternatives,
which analysts have said was an attempt to create a bidding war if
Rio launched a takeover bid.
Ivanhoe said the arbitrator also ruled against its counterclaim
that Rio had breached certain obligations under their
agreement.
"We will continue to strive to ensure that all Ivanhoe
shareholders are treated fairly," said David Huberman, chairman of
Ivanhoe.
Ivanhoe owns 66% of Oyu Tolgoi, which is due to start commercial
production in the middle of 2013, and the Mongolian government owns
the remaining 34% stake. Ivanhoe also owns a 58% interest in
Mongolian coal miner SouthGobi Resources Ltd. (SGQ.T) and a 59%
interest in exploration firm Ivanhoe Australia Ltd. (IVA.AU).
Oyu Tolgoi, located 80 kilometers north of China, is expected to
be one of the world's largest mines when fully operational. Annual
output in the first 10 years is projected to average 1.2 billion
pounds of copper, 650,000 troy ounces of gold, and more than three
million ounces of silver.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com