World
Institutional
links
Welcome back on
26 -29 August,
ONS 2008
Bridging
the energy gap
is ONS 2006 theme,
from 22-25 August,
in Stavanger, Norway
Petroleumworld
Business
Partners:
Centre for
Global Energy
Studies
  |
Rio Tinto seeks British deadline on BHP Billiton takeover bid
SYDNEY
Petroleumworld.com 12 11 07Anglo-Australian mining giant Rio Tinto said Tuesday that it had asked Britain's Takeover Panel to set a deadline for a formal takeover offer from the world largest miner BHP Billiton.
Rio Tinto's attempt to trigger the so-called "put-up-or-shut-up" clause contained in British takeover laws comes after the company last month rejected an informal BHP Billiton offer valuing it at more than 130 billion US dollars.
Rio Tinto said in a statement to the Australian Stock Exchange that if the Takeover Panel imposed a deadline and BHP Billiton failed to meet it, then its rival could make no fresh moves for six months.
Rio Tinto has said BHP Billiton's offer of three of its shares for a single Rio Tinto stock seriously undervalued the company, which is riding a China-driven resources boom.
Last month Rio Tinto, the world's third-largest miner, said it was poised for exceptional growth and expected to triple its iron ore output to meet growing global demand for metals and minerals, particularly from China.
BHP Billiton argues the merger would achieve massive synergies, particularly in the Western Australian iron ore projects of both companies, through the sharing of port and rail infrastructure and the joint development of new mines.
The company refused to comment directly on Rio Tinto's application to the British regulator but said it still believed to the takeover made sense.
"We are still committed to what we believe is a logical and compelling proposal and would like Rio Tinto to engage with us," a BHP Billiton spokeswoman said.
The unsolicited mega-merger proposal would create a global giant in coal, iron ore, copper and aluminium.
It has met stiff opposition from steel mill customers and particularly Chinese customers, who fear that the merger would give BHP Billiton too much pricing power in the iron ore market.
BHP and Rio already operate several joint ventures around the world, including the world-class Escondida copper mine in northern Chile. Both miners have iron ore operations in Western Australia's Pilbara region.
James Wilson, an analyst at Perth-based broker DJ Carmichael & Co, said Rio Tinto's application to the British regulator was a tactical move designed to force BHP Billiton's hand.
"BHP probably wants more time as it tries to get more (Rio Tinto) shareholders on its side," Wilson said.
He said there was compelling reasons for merging the two groups but BHP Billiton would probably need to increase its offer.
"Rio is probably right in saying the offer undervalues it, maybe BHP will have to raise the offer to 4-for-1 (shares)," Wilson said.
Shares in BHP Billiton closed up 61 cents 44.20 Australian dollars (39.12 US), while Rio Tinto fell 20 cents to 146.50.
Story from AFP 11 0631 GMT 12 07
Copyright© 2007 Petroleumworld. All rights reserved.
Your feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.Write to editor@petroleumworld.com
Any question or suggestions, please write to:
editor@petroleumworld.com
Best Viewed with IE 5.01+
Windows NT 4.0, '95, '98 and ME +/ 800x600 pixels