November 14, 2017 / 2:53 AM / a year ago

Ex-Xstrata chief Davis eyed for Rio Tinto chairman's job: FT

SYDNEY (Reuters) - Rio Tinto investors gave a mixed reaction to a report that former senior mining executive Mick Davis, now chief executive of Britain’s ruling Conservative Party, was well-placed to become the Anglo-Australian miner’s next chairman.

FILE PHOTO: Xstrata CEO Mick Davis leaves after an extraordinary shareholder meeting in the Swiss town of Zug November 20, 2012. REUTERS/Arnd Wiegmann/File Photo

The Financial Times newspaper reported late on Monday that Davis, the former head of Xstrata and architect of a $62 billion deal that saw it absorbed by Rio rival Glencore PLC in 2012, has emerged as a frontrunner for the post.

The South African-born businessman has held talks with Rio over the position, the newspaper said, citing unidentified people familiar with the matter.

Rio, due to name a successor to current chairman Jan du Plessis by the end of the year, declined to comment.

Shares in Rio closed nearly 1 percent lower in Sydney, in line with the benchmark ASX 200 index, as investors digested the potential implications of the appointment.

“The culture at Xstrata was less measured and more entrepreneurial than Rio’s,” said a Sydney-based fund manager, whose group owns Rio stock. He declined to be named as he wasn’t authorized to discuss the matter with media. “It’s hard to say if that approach would go down (well) there (at Rio).”

But Davis’ entrepreneurial ability - lauded by British Prime Minister Theresa May in confirming his appointment as Conservative Party chief in June - was welcomed elsewhere in the market.

“He has the relevant profile and skill set for the job,” said Brenton Saunders, a portfolio manager at BT Investment Management, which owns Rio stock.

Rio’s search for a new chair has been disrupted by unwelcome events.

John Varley, the non-executive director tasked with leading the search for a replacement for du Plessis, resigned the Rio board of in June after he was charged in Britain with fraud while chief executive of Barclays.

Meanwhile, the U.S. Securities Exchange Commission in October charged Rio and two of its former top executives with fraud, saying they inflated the value of Mozambique coal assets and concealed critical information while tapping the market for billions of dollars.

The two former executives deny the charges, and Rio said it would defend itself vigorously against the SEC’s allegations.

Amid the challenges facing Rio’s management, some investors questioned whether Davis’ leadership style would be the right fit for the miner.

“Davis is a very astute dealmaker, but whether that can be transferred into an effective chairman is untested,” said a Sydney fund manager holding Rio stock, who declined to be named given the sensitivity of the issue.

Reporting by James Regan; Additional reporting by Sonali Paul in MELBOURNE; Editing by Richard Pullin and Kenneth Maxwell

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below