Rio Tinto severs ties with Credit Suisse; hires Deutsche Bank as joint corporate broker - report
Rio Tinto [LON:RIO] [ASX:RIO], an FTSE-100 mining group, has severed its ties with former joint corporate broker Credit Suisse over the investment bank’s work for rival FTSE-100 mining and commodities group Glencore [LON:GLEN], Sky News reported.
The article cited one source close to the situation who said the small pool of senior mining bankers means that possible conflicts of interests would inevitably arise and would need to be handled carefully.
Glencore approached Rio Tinto regarding a potential merger in October 2014, the item noted. Rio Tinto rebuffed the approach.
Rio Tinto was angry that a senior banker at Credit Suisse, Mark Echlin, worked on a deal involving Glencore despite Credit Suisse assuring Rio that advisory work for both mining groups would be conducted separately.
Deutsche Bank will work alongside Rio Tinto’s current corporate broker JPMorgan, the article said.
The report cited unspecified sources who suggested that Credit Suisse had advised Rio Tinto for over 20 years.
It is not suggested that Echlin or Credit Suisse acted improperly, the item said. However, Rio Tinto board members are believed to have been unhappy with Echlin’s work on Glencore’s sale of a stake in its agricultural commodities subsidiary in June, according to the report.
Rio Tinto refused to comment, the item said. However, a source close to the company insisted that its hiring of Deutsche Bank reflects the quality of the bank’s previous work for Rio Tinto, according to the report.
Credit Suisse also refused to comment, the article said.
Rio Tinto’s market capitalisation stood at GBP 44.83bn (EUR 52.41bn) at the close of trading in London on Thursday, 25 August.