Rio Admits Underestimated Anger to Chinalco Deal, Guardian Says

Feb. 21 (Bloomberg) -- Rio Tinto Group admitted it underestimated investor anger over the $20 billion fundraising agreement with Aluminum Corp. of China and may change the deal, the Guardian reported, citing unidentified sources. Rio “conceded it underestimated shareholders’ strength of feeling on the issue of pre-emption rights” before announcing the proposed deal, the Guardian said. Rio may make changes if shareholders insist on their right to be offered any new issue first, according to the Guardian. Institutions want Rio to conduct a rights offer or make the convertible bonds offered to Chinalco available to all investors, the Guardian said. Rio will discuss its options with advisers this weekend, the Guardian reported, citing unidentified investors. To contact the reporter on this story: Caroline Hyde in London chyde3@bloomberg.net.