Posted on 28 Jan 2008
BHP Billiton which is trying to take over Rio Tinto in a $120 billion-plus deal, is working hard to get its financing in place.
The takeover saga is expected to go to the wire, as BHP Billiton tries to meet a deadline to formally declare its offer for Rio Tinto, a report in the Observer newspaper in
BHP Billiton has until February 6 to declare its hand under the so-called ``put up or shut up'' law in the
The Observer said BHP Billiton "was working around the clock to get the financing in place.''
Rio Tinto has been on the defensive since its larger rival approached it last year, seeking talks about a three for one scrip offer.
The target rebuffed the informal offer saying it undervalued the company and its future.
Since then, Rio Tinto has been underlining its growth potential and unveiled several exploration projects.
On Friday, it announced a joint venture with the world's largest copper producer, Codelco, to explore for the red metal in
Rio Tinto's shares rose more than nine per cent on Friday, as investors continued to ponder the possibility of BHP Billiton making an improved offer for the company.
"We're probably starting to see some of that takeover premium potential - that BHP might mount some sort of revised bid - starting to come back into the share price,'' Fat Prophet analyst Gavin Wendt said.
"People are saying it's an opportune time to buy the stock and hedge our bets, because if BHP decides to mount a bid before the deadline then we've got ourselves covered.''
Speculation has centred on an improved offer of 3.5 BHP Billiton shares for every Rio Tinto share, plus a cash component.
Rio Tinto chief executive Tom Albanese has previously declined to speculate of the potential of a better offer, reiterating that BHP Billiton's initial approach was "not even close'' to matching the company's value.
Rio Tinto shares ended up $10.03 at $118.50 on Friday and BHP Billiton up $1.98 to $36.80.
