BHP Billiton bid rejected by Rio Tinto

Mining firm, Rio Tinto, has rejected a $147 billion (£74.8 billion) takeover offer from rival BHP Billiton, saying the offer still does not reflect the value of the company and its expansion prospects.

Rio Tinto has already rejected an initial approach from BHP. Rio Tinto’s chairman, Paul Skinner, said BHP Billiton’s offers, while improved, still fail to recognise the underlying value of Rio Tinto’s quality assets and prospects.

BHP’s bid for Rio offered 3.4 of its shares for every Rio stock. This was higher than its previous informal three-for-one proposal, worth $130 billion, that was first announced in December 2007.

However, Marius Kloppers BHP chief executive, said that they will not return with a more generous bid, saying the formal bid is our first and only offer.

Last week, global metals companies Alcoa and Chinalco bought a 9% stake in Rio for $14 billion, analysts believed that aimed at blocking a BHP takeover.

A tie-up between the BHP and Rio Tinto has raised concerns that it would be too powerful as it would create a third of the world’s iron-ore market. BHP Billiton is already the world’s largest diversified mining company and Rio Tinto is the third-largest.

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