Legal & General Investment Management Friday said it was pleased Rio Tinto PLC (RTP) is pursuing a conventional rights issue for $15.2 billion instead of a strategic tie-up with Aluminum Corp. of China, or Chinalco.

"We are pleased that Rio Tinto have decided to pursue a conventional rights issue; it is important that companies of significant standing choose to honor shareholder rights," the fund said in a statement.

L&G, Rio's biggest institutional shareholder, in February objected to the proposed Chinalco deal because it violated preemption rights - in this case the ability to buy into a convertible bond on the same terms as Chinalco.

Rio Tinto Friday formally abandoned the Chinalco deal, which would have given the Chinese group minority stakes in a suite of assets for $12.3 billion and convertible bonds valued at $7.2 billion.

Company Web site: www.lgim.co.uk

-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; jeffrey.sparshott@dowjones.com