Rio Tinto PLC (RIO) and Mitsubishi Corp. (8058.TO) will pay 122 Australian dollars (US$126) per share to buy out minorities in Australian coal miner Coal & Allied Industries Ltd. (CNA.AU), in an indicative deal that values the company at A$10.6 billion, the target said Monday.

The two companies, which hold respectively 75.7% and 10.2% of the miner operating in the Hunter Valley of New South Wales state, would end up with stakes of 80% and 20% respectively after the offer, they said.

Perpetual Ltd. (PPT.AU) is the only other major shareholder, with 6.3% of the stock. Coal & Allied said it received the "incomplete, non-binding, condition and indicative proposal" from Rio on Saturday 6 August.

"CNA gives no assurances that the indicative proposal will lead to a takeover offer being made," the company said.

-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com

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