05/06/2009 - 12:10

BHP not ruling out fresh Rio Tinto bid

05/06/2009 - 12:10

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BHP Billiton may eventually launch a full-blown takeover bid for Rio Tinto, further to the mining giants' iron ore joint venture announced on Friday.

BHP Billiton may eventually launch a full-blown takeover bid for Rio Tinto, further to the mining giants' iron ore joint venture announced on Friday.

"We obviously can't rule in or rule out anything," BHP Billiton chief executive Marius Kloppers told a teleconference on Friday.

"As a result of our previous bid for Rio, there are a number of conditions that I can point at and those obviously still remain."

Mr Kloppers pointed to the more than $10 billion in synergies that the two companies say they seek from the WA joint venture, which "were such an important part of our original desire to put these two companies together".

"My focus and my team's focus is to try to get to those synergies as soon as possible," he said.

Late last year, BHP abandoned its takeover bid for Rio after it became concerned over the latter's mountain of debt, $US38 billion, incurred from the 2007 Alcan acquisition.

However, Rio will substantially reduce its net debt position to around $US23 billion after today launching a $US15.2 billion rights issue. It also canned its $US19.5 billion deal with China's Chinalco.

The rights issue is fully underwritten by Credit Suisse Securities (Australia), J.P. Morgan Securities Australia, Macquarie Capital Advisers and RBS Equity Capital Markets.

BHP is currently restricted from launching a takeover bid for Rio until November 25.

Reports from the UK in February said top institutional investors had urged BHP Billiton to relaunch a takeover bid for Rio Tinto to scupper its now abandoned deal with Chinalco.

 

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