Takeovers Panel to take another look at Rio Tinto, Packer & Co bout over $880 million uranium raising

Fund manager Willy Packer and Zentree Investments have landed a blow against Rio Tinto as the Takeovers Panel decides it will step in on a rights issue dispute after initially declining to get involved. Parties were notified on Friday by the panel regarding the pair’s bid to stop Rio pushing ahead with a $880 million rights issue with Energy Resources of Australia that would ultimately give the miner enough leverage for a full buyout. The panel had initially elected to stay clear of the saga, but has backtracked and will now investigate further into the raising following an appeal launched by Packer and Zentree at the end of September. ERA said the decision had created “uncertainty” for its planned capital raising, which is already a month behind because of the duo’s campaign. “Following the president of the Takeovers Panel’s consent to the review application, the review panel has decided to conduct proceedings,” the market was told on Monday. “The independent board committee will advise of a revised entitlement offer timetable after the outcome of the review application is known.” From here the Takeovers Panel is expected to set out a timetable for proceedings. The authority is yet to issue a statement on the matter. Cottesloe fund Packer & Co and Singaporean family office Zentree are minority investors in ERA, which is tasked with the rehabilitation of Rio’s Ranger uranium mine in the Northern Territory and also owns the lease to the untapped uranium deposit of Jabiluka. Zentree owns just over 3 per cent of ERA while Packer & Co has voting power of about 8.8 per cent. ERA’s majority investor Rio does not want to develop the new deposit following opposition from the Mirarr Traditional Owners. The Federal Government in July blocked the lease’s renewal — much to the dismay of Mr Packer who has invested substantially in ERA — on the same advice. Rio is obligated to support the recent 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. ERA had $650m in the bank at the end of June. ERA has indicated Rio plans to buy out the whole company at $0.002 apiece — a massive 87.8 per cent discount — once the offer is completed and its stake in the company ticks over 90 per cent. In the original referral to the umpire on September 5, Packer & Co and Zentree had claimed that ERA and Rio were “taking advantage of the ongoing litigation regarding the Jabiluka mineral lease and are making the 2024 offer while ERA’s future prospects are entirely uncertain.” The panel dismissed that application, saying in a statement later in the month it was “not minded to second guess” ERA’s independent board committee’s decisions regarding the proposed capital raise. Mr Packer has previously accused Rio of pushing ERA into its fourth heavily discounted capital raising in an attempt to seize control of ERA through compulsory acquisition.