FTSE 100-listed mining giant Rio Tinto has drawn up a shortlist of half a dozen suitors for its majority stake in Canada’s largest iron ore producer, according to sources.
Rio values Iron Ore Co of Canada at around $8bn (£5.2bn) and is seeking between $3.5bn and $4bn for its stake – roughly double industry estimates when the asset was earmarked for sale earlier this year.
Private equity firm Blackstone and newly merged miner trader Glencore Xstrata are two of the bidders on the shortlist, which was whittled down from 13 to 15 initial bids last month.
Rio has promised to focus on its key assets and sell non-core assets as it wrestles with $19bn debt, sluggish demand and weaker prices.
But a dearth of serious suitors and poor offer prices have restricted disposals, factors which could hinder Rio from getting its reserve price on the stake.
One of the sources said it was unclear when binding bids were due, as Rio was still seeking interest from buyers including some of China’s largest players, so far absent.
Sky News reported on Sunday that Rio Tinto is looking to raise £250m from floating its diamonds unit on the London Stock Exchange this year and has appointed Morgan Stanley as advisers.
City A.M. Reporter