Canadian Miner Likely to Be Taken Over (IVN, RIO)

About a month ago, Canadian miner Ivanhoe Mines Ltd. (NYSE: IVN) lost an arbitration decision that would have prevented mining giant Rio Tinto plc (NYSE: RIO) from adding to its 49% stake in the smaller company. The arbitrator ruled that Ivanhoe’s shareholders’ rights program could not be used to stop Rio from adding to its stake.

Rio’s five-year standstill agreement with Ivanhoe ends tonight, virtually guaranteeing that Rio will increase its stake in Ivanhoe and emerge with effective control.

Ivanhoe also revealed today that it has board approval to initiate a $1.8 billion bridge financing facility to fund development of its Oyu Tolgoi development in Mongolia. Rio has already providing $1.8 billion in bridge financing for the project, for which Ivanhoe and Rio are trying to raise $4 billion in total financing.