Filing Flows › Rio Tinto (RIO) › Takeover & LBO
Is Rio Tinto (RIO) a takeover target?
A leveraged buyout at today's price plus 30% ($108.85 a share) would return about 17% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. At $134.2B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $108.85 | today's $83.73 plus 30% |
| × shares | 1,256.0 million | |
| = Equity value | $136.7B | |
| + Debt refinanced | $0 | |
| − Cash | $2.5B | |
| = Enterprise value | $134.2B | 6.2× EBITDA of $21.5B |
| Fees | $2.7B | 2% of the price |
| New debt | $87.2B | 4.1× EBITDA at 7.65% a year; the limit that binds: 65% of the price |
| Buyer's own money | $49.6B | 36% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $59.4B | $22.2B | $6.7B | $12.7B | $74.5B |
| Year 2 | $61.1B | $22.8B | $5.7B | $13.9B | $60.5B |
| Year 3 | $63.0B | $23.5B | $4.6B | $15.2B | $45.3B |
| Year 4 | $64.9B | $24.2B | $3.5B | $16.6B | $28.7B |
| Year 5 | $66.8B | $24.9B | $2.2B | $18.1B | $10.6B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 4.8× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $119.0B | |
| − Debt left | $10.6B | |
| = Buyer's equity | $108.3B | |
| Money multiple | 2.18× | on $49.6B put in |
| Buyer's yearly return (IRR) | 16.9% |
Price against return
What the buyer makes at other premiums over today's $83.73.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $92.10 | 24.7% |
| 20% | $100.48 | 20.7% |
| 30% | $108.85 | 16.9% |
| 40% | $117.22 | 13.2% |
| 50% | $125.59 | 9.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $57.6B | |
| EBITDA, last 12 months | $21.5B | 37.3% of revenue |
| Depreciation and amortization | $6.6B | |
| Debt | $0 | |
| Cash | $2.5B | |
| Share price | $83.73 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 3.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 30% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Rio Tinto would cost about $110.94 a share, $139.3B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $100.48 | $126.2B |
| Median | 32.5% | $110.94 | $139.3B |
| High end (a quarter paid more) | 51.8% | $127.10 | $159.6B |
Rio Tinto's latest quarter
Rio Tinto, H1 2026: revenue $31.0B (+16% year over year), operating margin 29.5%, net earnings $6.7B, operating cash flow $9.2B. The chart follows the revenue to costs, profit and cash.
Questions
Is Rio Tinto being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Rio Tinto?
A leveraged buyout at today's price plus 30% ($108.85 a share) would return about 17% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. At $134.2B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Rio Tinto cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Rio Tinto would cost about $110.94 a share, $139.3B for all its shares.
Updated Nov 9, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.