Deals umpire rejects Willy Packer’s second go at Rio Tinto uranium takeover raising

The takeovers umpire has concluded that Rio Tinto’s proposed $880 million rights issue to Energy Resources of Australia is above board.

Cottesloe fund manager Willy Packer and Singaporean family office Zentree Investments successfully pushed last week in having an appeal heard by the Takeovers Panel into the raising that will likely push the pair out as minority investors in listed uranium clean-up company Energy Resources of Australia.

The panel had initially elected to stay clear of the saga, then backtracked and decided to investigate further, but ultimately concluded on Tuesday that it had “reached similar conclusions to the initial panel” after considering further submissions.

“(The panel) was satisfied that, in the exceptional circumstances of the matter, the independent board committee of ERA had complied with the panel’s guidance on rights issues,” a statement read.

There was also “nothing suggested” that ERA’s independent board committee had failed to undertake proper process regarding the raise, according to the umpire.

Mr Packer had launched the appeal claiming Rio was pushing a heavily discounted capital raising in an attempt to seize control of ERA through compulsory acquisition, which the mining giant has said it intends to do if the raising goes ahead.

The fund manager had also argued the timing of the raising was after ERA’s lease to an untapped sizeable uranium deposit in the Northern Territory was rejected by the Federal Government on advice from Traditional Owners. ERA has challenged that decision in Federal Court.

Rio, which owns nearly all of ERA, has no plans to develop the contested uranium deposit but needs to support ERA financially to foot the $2.4 billion clean up bill to rehabilitate the Ranger site south of Jabiluka which it mined since the 1980s.

The company has said it now intends to push ahead with the rights issue “as soon as possible”.

More to come.