Aluminum Corp of China, which paid US$14.05 billion for a stake in mining giant Rio Tinto, is unable to launch a full scale bid for six months because it told regulators at the time of the acquisition that it had no intention of doing so.
The statement now binds the company to a half-year 'quiet period', according to a source.
'When Chinalco talked to the authorities they made their intentions clear, they would not buy any more shares. You can rarely go against that,'' the source said.
Section 2.8 of the UK Takeover Code says that without the permission of the Takeover Panel, which overseas mergers and acquisitions, an acquiring company that states it has no intention of moving to a general offer is not able to make such an offer, nor are persons working in concert with them, for six months.
Chinalco, as Aluminum Corp is known, and US partner Alcoa had agreed to buy as much as a 14.9 per cent stake in Rio Tinto, according to a stock exchange filing last week. The two companies, via adviser Lehman Brothers, approached existing Rio shareholders on February 1 and managed to buy a 12 per cent stake by the end of the day.
It was the largest share raid, according to bankers in London, and surpassed the US$5.4 billion acquisition of a 20 per cent stake in South Africa's Standard Bank Group in October by Industrial and Commercial Bank of China as the largest overseas acquisition by a mainland company.