* 97 pct of Rio shareholders back coal assets sale to Yancoal
* Approval ends bidding war with Glencore (Adds Rio chairman quotes, details)
By James Regan
SYDNEY, June 29 (Reuters) - Rio Tinto shareholders approved the sale of a suite of Australian coal assets to China-backed Yancoal Australia for $2.69 billion, ending a bidding war with commodities trader Glencore .
The sale was approved by 97 percent of shareholders of Rio Tinto’s UK and Australian-listed shares, Rio Tinto said on Thursday in a statement to the Australian stock exchange.
Rio Tinto Chairman Jan du Plessis said funds from the sale had yet to be allocated within the company amid some calls by shareholders to use the money to boost dividends or buy back shares.
“What to do with the money? That’s a good problem to have,” du Plessis told a meeting of shareholders in Australia minutes before they voted overwhelmingly in favor of the deal.
“Let’s wait until we get the cheque in the bank,” du Plessis added.
Rio Tinto, which has dual primary stock listings in Australia and Britain, confirmed Yancoal as the preferred buyer on June 26 after Yancoal topped Glencore’s offer of $2.675 billion.
Votes were held in London and Australia because Yancoal is deemed a related party to one of Rio Tinto’s major shareholders, China-backed Chinalco.
Yancoal is a 78 percent-owned subsidiary of Yanzhou Coal Mining Co, which is 56 percent owned and controlled by a Chinese state-owned enterprise, Yankuang Group.
Rio Tinto’s London shareholders voted on Tuesday.
Both Yancoal and Glencore were forced to increase their offers above most analysts’ valuations of about $2 billion to remain in the running.
Before the votes, Rio Tinto highlighted a range of advantages in the Yancoal offer, which it said included a better chance of completion coupled with a $225 million break fee.
Importantly, according to analysts, Rio Tinto also said the Yancoal offer included “a faster and more certain timetable”, closing the transaction in the third quarter of 2017.
It would take until at least the first half of 2018 to complete Glencore’s transaction, according to du Plessis.
Glencore is already the world’s largest exporter of sea-traded thermal coal, with interests in 28 mines in Australia, Colombia and South Africa. It aimed to blend Rio Tinto coal with its existing operations to custom-tailor shipments to power-generating customers in Japan, South Korea and Taiwan.
It first tried to acquire Coal & Allied in 2015, when Rio Tinto made it clear that coal was no longer part of its growth strategy. Rio Tinto derives most of its revenue from iron ore, copper, aluminium and bauxite.
Glencore and Yancoal were not immediately available for comment. (Reporting by James Regan; Additional reporting by Sonali Paul; Editing by Richard Pullin and Muralikumar Anantharaman)