Rio Tinto likely on Glencore's wish list
Rio Tinto, the UK and ASX-listed miner, may be a possible target for Swiss group Glencore, the Australian Financial Review reported.
Glencore is seeking acquisitions, and Rio Tinto has been mentioned recently as a potential target by investment bankers, the report said, while noting many fund managers consider the talk merely a thought exercise. The item noted that Bernstein Research said this week that Rio Tinto could be a logical target for Glencore.
The report cited Pengana Capital fund manager Tim Schroeders as saying that while Rio Tinto is likely of interest to Glencore, the buyer is not likely to make an offer, as at current valuations such a move would be aggressive.
Rio Tinto currently has a market value of AUD 109.2bn (USD 95.7m), while Glencore is worth AUD 84.8bn. The paper also noted that any deal between Rio and Glencore would likely encounter major regulatory obstacles.
Schroeders noted that Glencore’s management works with much lower quality assets than Rio Tinto does and Glencore would love to secure a portfolio of top quality assets.
Arnhem Investment Management’s Neil Boyd-Clark also said it is important to note that Glencore’s assets are of lower quality than Rio’s.
Source Australian Financial Review