Rio Tinto 'mulling counter-bid'
Rio Tinto is being eyed by BHP Billiton
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Published by Gibson Square, out November 15th, 204 pages, £12. |  |
Friday, 16, Nov 2007 09:42
Rio Tinto, the world's third-largest mining company, is considering making a counter-bid for rival BHP Billiton, according to a report.
The company rejected a proposed all-share offer made by BHP, the world's largest mining company, earlier this month. Rio Tinto said the approach "significantly" undervalued its business.
According to the Wall Street Journal the takeover target is now pondering whether to make its own bid for BHP in order to fend off a buyout by the company.
Meanwhile the Telegraph reports Rio Tinto is set to defend the company's independence during a meeting with City investors on Monday.
According to the newspaper the presentation will focus on Rio Tinto's development pipeline and explain how the company's plans would create more value for shareholders than a BHP tie-up.
At the beginning of this week BHP, which has confirmed that Rio Tinto has yet to agree to discussions over its proposed offer, attempted to sweeten its approach.
Rio Tinto's suitor pledged to return $30 billion (£14.4 billion) to shareholders through a share buyback if a takeover deal goes ahead.
BHP also stressed that its proposal to offer three of its shares for each Rio Tinto share constituted a premium of approximately 28 per cent for the latter's investors.
The mining giant, which claims a tie-up between the two groups would create the world's "premier diversified natural resources company", added such a deal would deliver cost savings of $3.7 billion (£1.8 billion) per annum after seven years.
Meanwhile the combined group would be "uniquely positioned" to meet strong and growing demand for natural resources from expanding economies such as China and India, BHP insisted.