Rio spurns improved BHP offer

LONDON: Mining group Rio Tinto spurned an improved US$147.4-billion (K432.9 billion) takeover offer from rival BHP Billiton on Wednesday, saying the terms of the proposed mega-merger were not in the interests of shareholders.
Amid speculation Rio Tinto was set to become the centre of a bidding battle, company management said the proposals from BHP “fail to recognise the underlying value of Rio Tinto’s quality assets and prospects”.
Anglo-Australian BHP, the world’s biggest mining group, had earlier proposed to exchange 3.4 of its own shares for each Rio Tinto stock, an improvement on its previous three-for-one offer that had also been rejected as inadequate.
BHP said the combination would help to meet rising demand from resource-hungry China, but the proposed tie-up has raised concerns in Beijing because of the market power of a merged group.
Last week, state-owned Chinese aluminium giant Chinalco teamed up with US-based peer Alcoa to buy the equivalent of 9% of Rio Tinto for about US$14 billion (K41 billion).
The move was seen by analysts as an attempt to thwart a BHP takeover and The Times reported on Wednesday, citing sources close to Chinalco, that the Chinese group and Alcoa may make a counter bid for Rio Tinto.
There has been speculation among market traders that Chinalco was looking to buy Rio Tinto to break the company up and that Alcoa would take Rio Tinto’s Alcan aluminium assets. – AFP