Rio Tinto shareholder threatens Chinalco deal

Legal & General Investment Management Ltd, the largest shareholder of Anglo-Australian miner Rio Tinto, indicated that it would vote against a US$19.5 billion cash infusion by Alumnium Corp of China (Chinalco), the Wall Street Journal reported. "We expressed our view that shareholder pre-emption rights are paramount. We look forward to engaging further with the company to achieve an outcome acceptable to all shareholders," the UK-based money manager said after meeting with Rio management to detail its reservations. Under the terms of the deal reached with Chinalco, the Chinese company would buy US$7.2 billion in convertible bonds in addition to investing US$12.3 billion in strategic partnerships. Chinalco would have the right to up to two seats on Rio’s board.