24th Jul 2006 14:43
Rio Tinto PLC24 July 2006 Rio Tinto agrees to tender shares of Ashton Mining of Canada to bid by StornowayDiamond Rio Tinto has agreed to tender its shares in Ashton Mining of Canada Inc.("Ashton") to a takeover bid for Ashton which was announced today by StornowayDiamond Corporation ("Stornoway"). Rio Tinto (through both Ashton Canada Pty.Limited ("ACPL"), an indirect, wholly owned subsidiary of Rio Tinto Limited, andQIT-Fer et Titane Inc. ("QIT), an indirect, wholly owned subsidiary of Rio Tintoplc), holds 49,037,982 common shares of Ashton, representing approximately 51.7per cent of Ashton's issued and outstanding common shares. ACPL and QIT have entered into a lock-up agreement with Stornoway under whichACPL and QIT have agreed to tender their Ashton shares and Stornoway has agreedto make the takeover bid for all of Ashton's issued and outstanding commonshares. Under the Stornoway takeover bid, Ashton shareholders will be entitledto receive, at their election, either (i) C$1.25 in cash (the "All CashAlternative") or (ii) one Stornoway common share plus C$0.01 in cash, in eithercase for each Ashton share held, subject to a maximum of C$59,500,000 cashavailable under the All Cash Alternative. Tendering shareholders who elect theAll Cash Alternative may have their entitlement to cash pro-rated depending onthe percentage of Ashton shares tendered to the bid in respect of which the AllCash Alternative is selected. ACPL and QIT intend to elect the All Cash Alternative for their Ashton sharesalthough it is anticipated a portion of the total consideration payable to ACPLand QIT will be in the form of Stornoway shares. The number of such shares andthe percentage of Stornoway's issued and outstanding shares ACPL and QIT mayacquire will not be known until the completion of the bid. ACPL's tender of 4,912,249 of the 33,848,221 Ashton shares owned by it issubject to regulatory approval pursuant to the terms of an escrow agreementwhich ACPL entered into at the time of Ashton's initial public offering in 1993. Rio Tinto has no present intention of acquiring other securities of Ashton or,except as contemplated by the agreement with Stornoway, disposing of any of thesecurities of Ashton which it holds. Under the agreement with Stornoway, ACPL and QIT have agreed not to purchase orenter into any agreement to purchase any other securities of Ashton until thetermination of the agreement. The agreement also precludes ACPL and QIT fromtendering or voting any of their Ashton shares in favour of any otheracquisition proposal relating to Ashton and in certain circumstances requiresACPL and QIT to vote against other acquisition proposals or actions which mightprevent, delay or interfere with Stornoway's bid. ACPL and QIT will be paid C$2,000,000 by Stornoway if the lock-up agreement isterminated, other than as a result of a breach by ACPL or QIT, and Stornowaydoes not take up and pay for the Ashton shares tendered to the bid by ACPL andQIT. The lock-up agreement will terminate automatically on December 26, 2006unless extended by mutual agreement of the parties. For further information, please contact: LONDON AUSTRALIA Media Relations Media RelationsNick Cobban Ian HeadOffice: +44 (0) 20 7753 2305 Office: +61 (0) 3 9283 3620Mobile: +44 (0) 7920 041 003 Mobile: +61 (0) 408 360 101 Investor Relations Investor RelationsNigel Jones Dave SkinnerOffice: +44 (0) 20 7753 2401 Office: +61 (0) 3 9283 3628Mobile: +44 (0) 7917 227 365 Mobile: +61 (0) 408 335 309 David Ovington Susie CreswellOffice: +44 (0) 20 7753 2326 Office: +61 (0) 3 9283 3639Mobile: +44 (0) 7920 010 978 Mobile: +61 (0) 418 933 792 Website: www.riotinto.comHigh resolution photographs available at: www.newscast.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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