9th May 2005 09:02
Rio Tinto PLC09 May 2005 Rio Tinto increases off-market buy-back tender to A$1 billion in response tostrong demand Rio Tinto Limited today announced the successful result of its off-market sharebuy-back (the "Buy-Back"). A total of approximately 27.3 million shares,representing 8.7 per cent of Rio Tinto Limited's publicly held issued sharecapital (2.0 per cent of the Rio Tinto Group(1)), were bought back under theBuy-Back at A$36.70 per share at a cost of approximately A$1 billion (US$780million). The buy-back price of A$36.70 per share represents a 14 per cent discount to therelevant volume weighted average price of Rio Tinto Limited shares sold on theASX over the five trading days up to and including the closing date of theBuy-Back(2). It also represents a discount of 15.6 per cent to the closingprice for Rio Tinto Limited shares on 6 May 2005, of A$43.50. Rio Tinto's Finance Director, Guy Elliott, said, "We are very pleased to havesignificantly increased the size of the Buy-Back to A$1 billion from theindicative A$400-$500 million previously announced. This reflected strongdemand at a very attractive discount. It followed a vote by shareholderscomprehensively in favour of the capital management resolutions as announcedfollowing the recent Rio Tinto Annual General Meetings in London and Sydney. As a result, we have now accomplished over half of our previously announcedUS$1.5 billion capital management programme and we retain the financialflexibility both to complete this programme and to pursue other opportunities. This highly efficient return of capital reflects one feature of our overallapproach to investment of cash flow, ranking after investment in value-enhancingopportunities and after the continuation of the Group's long establishedprogressive dividend policy, which was recently rebased upwards by 20 per cent." Under a separate buy-back, Tinto Holdings Australia Pty Limited ("THA"), awholly owned subsidiary of Rio Tinto plc, will accept the same A$36.70 buy-backprice set under the Buy-Back for a proportion of its 37.5 per cent holding ofRio Tinto Limited ordinary shares (the "THA Matching Buy-Back") so that THA'sproportional shareholding in Rio Tinto Limited does not increase as a result ofthe Buy-Back. Rio Tinto Limited is therefore buying back approximately 16.4million shares from THA under the THA Matching Buy-Back for approximately A$600million. In total, Rio Tinto Limited is buying back ordinary shares to the value ofapproximately A$1.6 billion but, of this amount, the A$600 million arising fromthe THA Matching Buy-Back remains within the Rio Tinto Group because of the duallisted companies structure. Notwithstanding these buy-backs, Rio Tinto Limitedexpects to continue to be able to pay fully franked dividends for the reasonablyforeseeable future. As buy-backs of Rio Tinto Limited's publicly held shares both on or off marketare subject to a 10 per cent limit approved by shareholders, this Buy-Backutilises most of the available capacity for Rio Tinto Limited to buy back itspublicly held shares under existing shareholder approvals during the next 12months. All shares tendered as Final Price Tenders and at a discount of 14 per cent havebeen accepted in full, subject to any minimum price condition. No scale backhas been applied to any of the accepted tenders. Rio Tinto Limited will not buyback shares tendered at discounts from 8 per cent to 13 per cent inclusive.Tenders conditional on minimum prices of A$37.50 or above will also not bebought back. For shareholders whose shares are bought back under the Buy-Back, A$32.70 of thebuy-back price will be treated for Australian tax purposes as a fully frankeddividend. For Australian capital gains tax purposes, the deemed capitalproceeds for shareholders other than corporate tax entities will generally betaken to be A$6.44, being the A$4.00 capital component plus A$2.44, being theexcess of the Tax Value(3) over the buy-back price. It is expected that cheques will be posted to shareholders, and instructions forpayment to shareholder bank accounts will be issued, by no later than Tuesday,17 May 2005. Shares that have been tendered into the Buy-Back but not boughtback are expected to be released to shareholders' holdings on or about Tuesday,10 May 2005. For any queries on the Buy-Back, shareholders may call 1300 657 022 toll freewithin Australia or +613 9415 4137 if calling from outside Australia, or visitour website at www.riotinto.com. For further information, please contact: LONDON AUSTRALIA Media Relations Media Relations Lisa Cullimore Ian Head Office: +44 (0) 20 7753 2305 Office: +61 (0) 3 9283 3620 Mobile: +44 (0) 7730 418 385 Mobile: +61 (0) 408 360 101Investor Relations Investor Relations Nigel Jones Dave Skinner Office: +44 (0) 20 7753 2401 Office: +61 (0) 3 9283 3628 Mobile: +44 (0) 7917 227365 Mobile: +61 (0) 408 335 309 Richard Brimelow Susie Creswell Office: +44 (0) 20 7753 2326 Office: +61 (0) 3 9283 3639 Mobile: +44 (0) 7753 783 825 Mobile: +61 (0) 418 933 792 Website: www.riotinto.com -------------------------- (1) This is based on the aggregate number of ordinary shares on issue in RioTinto plc and Rio Tinto Limited, but excluding from that aggregate the Rio TintoLimited shares held by Rio Tinto plc through its subsidiary Tinto HoldingsAustralia Pty Limited. (2) The cumulative VWAP of Rio Tinto Limited ordinary shares sold on the ASX, asadjusted for certain trades considered to be not "at-market", over the fivetrading days up to and including 6 May 2005, was A$42.6726, calculated to fourdecimal places. (3) The Tax Value of A$39.14 was calculated as A$40.02 adjusted by the movementin the Rio Tinto plc share price on the London Stock Exchange from the closingprice of £16.85 on 2 February 2005 to the opening price of £16.48 on 6 May 2005,as agreed with the Australian Tax Office. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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