India Could Challenge Rio's Riversdale Bid

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Several state-run Indian energy producers could decide as early as next week to mount a challenge to Rio Tinto's $3.9 billion takeover offer for Australia's Riversdale Mining, a deal that has been approved by India's Tata Steel, one of Riversdale's largest shareholders.

Rio Tinto (RIO), one of the world's largest mining companies, could face competition for Riversdale from International Coal Ventures, a combination of four Indian companies that may make a bid at the behest of the Indian government. International Coal Ventures says it will be able to top Rio's bid and that funding will not be an issue.

Coal India Ltd. holds about 28 percent of ICVL. Steel Authority of India, the nation's second-biggest producer of the metal, also has 28 percent, while NTPC Ltd., its largest power generator, NMDC Ltd., its top iron-ore producer, and steelmaker Rashtriya Ispat Nigam Ltd. own about 14 percent each, according to Bloomberg News.

Citigroup is advising the Indian consortium on the deal. Australia's Foreign Investment Review Board approved Rio's offer last week.