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, falling 20% and dipping under $17 each.
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.
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