Tata Steel says Riversdale Mining stake strategic for it

Global steel major Tata Steel today said it views Africa-focused Riversdale Mining as a strategic investment.

The statement comes in the wake of global miner Rio Tinto's $3.5 billion bid for possible acquision of Riversdale, in which Tata Steel has significant about 24 per cent stake.

"Tata Steel views Riversdale Mining as a valuable strategic investment and continues to be interested in developing the tenements of the company," the steel maker said in a statement.

Tata Steel will continue to monitor the situation and will take appropriate action as deemed necessary, it said, adding that the company has taken note of media speculation regarding Riversdale Mining and the subsequent release.

Riversdale Mining in a statement today said, "The company has had discussions with Rio Tinto concerning a possible transaction at the corporate level for indicative consideration of $15.00 per Riversdale share."

Riversdale further said, "While discussions with Rio Tinto are ongoing, there is no certainty that Rio Tinto or any other party will proceed with any proposal for the acquisition of Riversdale or, if it does, the timing of such a proposal or the terms and conditions on which any such proposal will be made."

Riversdale's statment followed media reports concerning a possible takeover bid by Rio Tinto for the company.

Shares of Tata Steel surged as much as 3.38 per cent on the Bombay Stock Exchange and witnessed a day's high of Rs 639.70, up from its previous close of Rs 614.20.