Private equity firm Resource Capital Fund, which owns 48% of coking coal developer Riversdale Resources Ltd., rejected an offer from Gina Rinehart's Hancock Prospecting Pty. Ltd. to fully acquire the company but left the door open for a higher offer, The Australian Financial Review reported March 21.

Hancock Prospecting subsidiary Hancock Corp. Pty. Ltd. offered to acquire Riversdale in February in a two-tiered offer starting at A$2.20 per share and increasing to A$2.50 per share if its stake topped 50% before closing.

Phil King's Regal Funds Management, which has a 1% shareholding in Riversdale, also rejected the Hancock offer on the grounds that it significantly undervalues the company.

Riversdale founders Michael O'Keefe, Steve Malyon and Anthony Martin agreed to accept the Hancock offer.

The Hancock bid for full ownership of Riversdale and its preproduction-stage Grassy Mountain coal project in Alberta is a considerable increase from the A$1.70 per share it paid for a 19.9% stake in August 2018.

Riversdale Chairman Gary Lawler warned shareholders that in light of the stand Resource Capital Fund and Regal Funds took, they should consider the Hancock offer as A$2.20 per share and not take any action as existing investors other than Hancock also want to acquire more shares.

The company is engaging with various parties in a bid to get a higher offer and commissioned an independent expert's report from Grant Thornton, which will include a company valuation.