Willy Packer claims Rio Tinto ‘taking advantage’ in Energy Resources of Australia takeover spat

Willy Packer is not going down without a fight in his bid to stop Rio Tinto swooping on Energy Resources of Australia, alleging the mining giant miner is “taking advantage” as he escalates the saga in his escalation of the saga to the takeovers umpire. The Takeovers Panel yesterday confirmed it had received an application from ERA’s minority investors Packer & Co and Zentree Investments, who are trying to stop Rio from hoovering up the shares they don’t already own in the uranium clean-up company, via a heavily discounted $880 million entitlement offer. Packer & Co has poured about $80m from its his Cottesloe-based Investigator Trust into ERA, but the long-term investment bet has been thwarted by a Federal Government decision to not renew the lease for the massive Jabiluka uranium deposit in the Northern Territory, based on advice from traditional owners. After a push by the fund manager, ERA is challenging that decision in Federal Court, but the company also sought funding in the interim from investors to continue paying the $2.4 billion clean-up bill for the Ranger mine, which Rio operated until 2021. Obligated to continue funding the clean-up and honour rehabilitation commitments, Rio has offered to pour in $750m into ERA via the raising, which would lift its stake to more than 90 per cent and clear the way to buy out Packer & Co and Zentree’s combined stake of 11.86 per cent. The minority investors have claimed to the Takeovers Panel that ERA and Rio are “taking advantage of the ongoing litigation regarding the Jabiluka mineral lease and are making the 2024 offer whilst ERA’s future prospects are entirely uncertain.” They also claim ERA — which had $650m in the bank at the end of June — doesn’t need the funds immediately, and that the company hasn’t properly disclosed the basis for rehabilitation costs to the market and their impact on the price of ERA’s shares. The pair want the Takeovers Panel to protect their investment interest by stopping Rio from being able to cross the 90 per cent threshold and by extension proceed with a compulsory takeover. They have also demanded ERA meet a list of ASX disclosure rules and approvals before Rio can plough any more cash into the company. The Takeovers Panel said it had not yet appointed a specific panel to the spat, and “no decision has been made whether to conduct proceedings”. Rio has said it would not develop Jabiluka unless it had approval from traditional owners, who have opposed the development. Mr Packer, pictured, last week said his fund would have considered putting a small amount into ERA if the funds were needed to see it through the court case, but to pour in another $80m would be a “gamble”.