An independent arbitrator has upheld Rio Tinto's ( RIO ) claim challenging a shareholder rights plan in effect at Ivanhoe Mines (IVN.TO,IVN), allowing the large diversified miner to purchase additional shares in Ivanhoe.
In a statement, however, Rio said at this time it has no intention of making a full takeover bid for Ivanhoe's shares,' later adding that it "reserves the right to change its intention in the future."
Ivanhoe shares plunged on the news in U.S. pre-trade this morning, falling over 10% to $18.60 each, down $2.10. Rio stock is up nearly 2% at $50.00 a share ahead of the bell.
Rio currently owns 49% of Ivanhoe stock. The arbitrator also dismissed Ivanhoe's counterclaim that Rio Tinto breached a 2006 private placement agreement with Ivanhoe. As part of the 2006 private placement, the companies established a 5-year stand-still agreement -- later extended through Jan. 18, 2012 -- capping Rio's stake in Ivanhoe.
As part of the decision, the arbitrator dismissed Ivanhoe's counterclaim and ruled that Rio Tinto did not breach the Private Placement Agreement with Ivanhoe.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.