Takeovers umpire decides not to get involved in Packer & Co, Rio Tinto blue

[Pelican Press 0]

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Takeovers umpire decides not to get involved in Packer & Co, Rio Tinto blue

A push by fund manager ****** Packer and Zentree Investments to kibosh Rio Tinto’s heavily discounted capital raising in uranium clean-up company Energy Resources of Australia has been thwarted by the Takeovers Panel.

Rio-controlled ERA told the market on Wednesday the takeovers umpire had declined to take action on calls for a declaration of unacceptable circumstances regarding the miner’s $760 million rights issue.

The panel released a statement shortly after saying it was “not minded to second guess” ERA’s independent board committee’s decisions regarding the proposed capital raise.

The call for funds came after an application to renew ERA’s Jabiluka uranium lease in the Northern Territory was sensationally blocked by the Federal Government in July on the advice of traditional owners, and claims cash reserves were likely to run dry by the end of the year.

That decision has been challenged by ERA in the Federal Court.

A representative of the Mirarr Traditional Owners of the Jabiluka site joined as a party to the action opposing ERA’s legal challenge last week.

Cottesloe-based Packer & Co had tipped $80m into ERA out of its Investigator Trust on the grounds the uranium lease would not be rejected and on the belief it could one day potentially become a mine.

Mr Packer has been a vocal critic of Rio — which plans to take up shares in the company at an 87.8 per cent discount.

“I have never seen a company have a rights issue, let alone a $800m issue, when its only asset is subject to a legal case,” he told The West *********** following Wednesday’s panel decision.

“It places the 9000 shareholders who are being asked to contribute $100m in an invidious position with no information as to the possibility of ERA successfully recovering one of the world largest uranium deposits.”

Rio is obligated to support the raising to ensure ERA can pay the $2.4 billion clean up bill to rehabilitate the Ranger site south of Jabiluka it had mined since the 1980s.

With the Takeovers Panel electing to steer clear of the saga, ERA told the market it would be pushing ahead with its entitlement offer “as soon as possible”.

ERA has indicated Rio plans to buy out the whole company at $0.002 once the offer is completed and its stake in the company ticks over 90 per cent.

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