De Beers withdraws from bid

De Beers Consolidated Mines (DBRSY-Q) is withdrawing its takeover bid for Australia’s Ashton Mining now that rival Rio Tinto (RTP-N) has received acceptances for 51.89% of Ashton’s shares.

De Beers says its withdrawal “will provide Ashton shareholders and the Ashton board with clarity on the status of De Beers’ offer and adequate opportunity to effect their investment decisions.” Several conditions of De Beers’ offer remain unfulfilled.

Rio Tinto secured control of Ashton in a last-minute deal that saw it increase its takeover bid to $A2.20 per Ashton share from A$1.85 and acquire majority shareholder Malaysia Mining Corporation Berhad’s entire 49.72% holding.

Ashton’s directors say they intend to accept Rio’s revised unconditional cash offer of $2.20 per Ashton share for their personal shareholdings. Ashton’s shareholders can elect to receive cash or a paper alternative of one Rio Tinto Ltd. or Rio Tinto Plc share for every 14 Ashton shares.

The Ashton board of directors has declared a special full-franked dividend of A20 per share, payable on Dec. 7. The value of the special dividend, once paid, will be deducted from Rio’s offer price. Rio has extended the closing date of its offer to Nov. 27.

In related news, subsidiary Ashton Mining of Canada (ACA-T) intends to raise up to $2.3 million by selling, on a best-efforts basis, 3 million units priced at 75 each.

A unit will consist of one flow-through share and a half-warrant. A whole warrant will allow the owner to buy an additional non-flow-through share at 95 for 18 months.

Proceeds will be used to fund winter and spring exploration programs on Ashton’s Canadian diamond properties.