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BHP makes takeover offer for Rio | BHP makes takeover offer for Rio |
(20 minutes later) | |
Anglo-Australian mining giant BHP Billiton has said it has formalised a takeover bid to buy its rival Rio Tinto in a deal worth about $147bn (£74.8bn). | Anglo-Australian mining giant BHP Billiton has said it has formalised a takeover bid to buy its rival Rio Tinto in a deal worth about $147bn (£74.8bn). |
BHP sweetened its original bid approach, offering 3.4 of its shares for every Rio Tinto share - better than the previous three-for-one offer. | |
Rio had spurned an offer at that level, saying it undervalued the firm. | |
A tie-up would create a business with a third of the world's iron-ore market, but a deal could still face resistance. | |
"The offer should be enough to get BHP talking to Rio," said Rob Patterson, managing director of fund manager Argo Investments. | |
"We think to raise the offer to that degree probably makes sense." | |
Obstacles | |
Last week, Chinese mining firm Chinalco teamed up with US aluminium giant Alcoa to buy a 12% stake in Rio Tinto for $14.05bn. | |
Analysts said the move, the largest Chinese investment overseas, was an attempt to block BHP's efforts to buy Rio. | |
Alcoa and Chinalco said at the time they did not intend to make an offer for the whole of Rio Tinto. | |
But they said they reserved the right to do so if Rio received a firm bid from a third party. |