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Riversdale Mining Ltd (ASX:RIV) has confirmed it has been in discussions with Rio Tinto Ltd (ASX:RIO) about a possible takeover.
The indicative price of $15 per Riversdale share values the company at around $3.5 billion.
Responding to media speculation Rio is planning to launch a takeover, Riversdale says it has undertaken confidential discussions with the global miner.
However, Rio has advised Riversdale it is not in a position to submit a proposal for the potential acquisition of the company.
Following the news shares in Riversdale advanced over 11 per cent in early trade and are currently $15.59.
Riversdale Mining reported a profit of $1.34 million in the year to 30 June 2010.