Deal street

Written by fe Bureau | Updated: Dec 23 2010, 04:39am hrs
Rio Tinto makes $3.8-bn offer for Riversdale

Global miner Rio Tinto is talking to Australian-listed coal miner Riversdale about a higher $3.8-billion takeover bid, according to a media report, ahead of a possible bidding war for the African-focused target. Shares in Sydney-based Riversdale, which has previously confirmed it was talking to Rio, were placed in a trading halt on Tuesday ahead of an announcement about a takeover. Rio Tinto had formalized an offer to buy Riversdale for around A$16 per share, The Australian newspaper reported on its website. The offer, higher than A$15 per share previously on the table, would value Riversdale at $3.75 billion. The price is a 13.5% premium to Riversdales close on December 3, the companys last trading price before news of Rios interest was announced. A Riversdale spokesman declined to comment. Rio Tinto was not immediately available to comment. A source familiar with the situation said talks with Rio Tinto continued but declined to comment on the media report. Investors said Rio Tinto may still have to look at a joint venture rather than a full takeover to get a deal past Riversdales major shareholders, which include Indias Tata Steel which owns about 24%, Brazilian steelmaker CSN and US Investment firm Passport Capital.

DSM to buy Martek for $1.09 bn

Dutch chemicals group said on Tuesday it would buy Martek Biosciences Corporation for $1.087 billion (829 million euros) in cash to specialize further in the niche food nutrition industry. DSM has been repositioning itself in recent years away from bulk chemicals to focus on niche life sciences and materials sciences and last week completed its divestment programme, saying it had a war chest of 2 billion euros for acquisitions. DSM said its offer price of $31.50 per Martek share represents a 35% premium to the US-based companys closing share price on December 20 and that Marteks board of directors is recommending the offer to shareholders. The worlds largest vitamins maker said the deal gives DSM a new growth platform for natural, healthy polyunsaturated fatty acids nutrition ingredients, adding that Martek is a global leader, especially in infant formula nutrition. Martek had annual net sales of $450 million for its fiscal year which ended October 31, 2010 and estimated earnings before interest, tax, depreciation and amortization of $115 million to $120 million.

Posco may bid for Korea Express

Posco, the worlds No.3 steelmaker, said on Tuesday that it plans to review entering a bid for a controlling stake worth about $1 billion in Korea Express, a deal that could become its second major acquisition in less than a year. Major shareholders of Korea Express Co Ltd Asiana Airlines Inc , a Kumho Asiana Group subsidiary, and Daewoo Engineering & Construction Co Ltd are considering selling a combined 47.9% stake in the countrys top logistics company, worth about $903 million at the Tuesdays closing share price. Well review Korea Express once the auction schedule is officially confirmed, said POSCO spokesman Choi Doo-jin. The sale would help cash-strapped Kumho Asiana Group secure further liquidity after a debt-fueled acquisition forced it to sell Daewoo Engineering & Construction to key creditor Korea Development Bank for $1.9 billion this month.

TD Bank close to Chrysler deal

Toronto-Dominion Bank is close to an agreement to buy Chrysler Financial from private equity firm Cerberus Capital Management for $6.3 billion, a source familiar with the matter said. A deal for the lender could be announced as soon as Tuesday, the source said. A deal would help Cerberus recoup a big chunk of its disastrous $7.4 billion purchase of Chrysler Group, the automaker. It would also help TD, Canadas No. 2 bank, add to its extensive US East Coast assets. Cerberus, which is led by co-founder Stephen Feinberg, would retain about $1 billion in assets as part of the deal, the Wall Street Journal reported separately. TD and Cerberus declined to comment. Chrysler Financial, the former lending arm of the automaker, had its operations reduced as part of a US government-sponsored restructuring of Chrysler and General Motors last year.