Rio Tinto’s Chinalco U-Turn May Not Save Albanese

Rio Tinto Group Chief Executive Officer Tom Albanese’s decision to ditch an Aluminum Corp. of China investment in favor of a $15.2 billion rights offer to appease shareholders may not be enough to keep him in the job.

Albanese, 51, described the proposal from Chinalco, as the state-owned company is known, in February as “the best financial solution” to reduce debt, having earlier rejected a $66 billion takeover bid from BHP Billiton Ltd. Now, the $19.6 billion investment is off, and BHP will pay $5.8 billion to create an iron-ore joint venture with Rio.

“He has to go,” said Charles Kernot, a London-based analyst at Evolution Securities. “He’s been so closely associated with this deal that its failure must almost seal his fate.”

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- Posted: 2009-06-05 10:28:11

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