Posted on 07 Feb 2008
BHP Billiton Ltd/Plc launched a hostile $147.4 billion bid for mining rival Rio Tinto Ltd/Plc on Wednesday, in what could be the second biggest takeover in corporate history.
A marriage of the two mining giants would create the world's third-richest company, with a market capitalisation eclipsed only by Exxon Mobil and General Electric
It would also create a company that dominates world supplies of dozens of key minerals, raising concerns among industrial buyers from Europe to
BHP sweetened its initial approach by 13 percent, offering 3.4 of its shares for every
"The Rio Tinto shareholders will now decide," BHP Chief Executive Marius Kloppers told Reuters.
BHP, which posted a 2.4 percent drop in first-half profit to $6.017 billion, needs at least 50 percent of holders of Rio's Australian and
"This is our first and only offer," Kloppers told a briefing, though he later would not say if that meant it was the final one.
"I think it's closing a door that shouldn't have been closed," said Ken West, a partner in Perennial Growth Management.
Some analysts were sceptical the bid would be successful.
"Given our market conditions and the outlook, if you look at comparative mergers and acquisitions, it probably is not going to get there," said Perennial's West.
Kloppers said the Rio board refused to discuss a merger before making the offer, but believed the offer still held widespread support among
As an added incentive, Kloppers promised a $30 billion share buyback if the deal goes through. BHP said
The offer equates to a 45 percent premium to
