Rio Tinto stock soars on LSE on BHP Billiton takeover talk
28 Mar 2009
Mining giant Rio Tinto's shares have outperformed peers in London on speculation that the the world's largest miner BHP Billiton could re-emerge as a suitor for the Anglo-Australian miners.
In late London trading, Rio shares were up 3.9 per cent, making it the best performing FTSE100 mining stock in a broadly weaker sector. The FTSE350 mining index was down 0.9 per cent.
Rio Tinto last year spurned a takeover proposal from BHP which offered 3.4 BHP shares for each Rio share. BHP, citing its rival's heavy debt and a sharp downturn in commodity markets. (See: Rio Tinto rejects BHP's revised offer of $147 billion).
In November 2008, European competition regulators have sent a formal complaint to BHP Billiton listing out anti-trust objections to its proposed takeover of Rio Tinto Group.
Since a merged BHP-Rio would create a global force in iron ore, metallurgical coal, aluminum, copper, uranium and other commodities, steel firms throughout the world, including in Europe, China and elsewhere have vehemently opposed the merger and have urged the EU to reject the takeover. (See: China calls for Europe to reject BHP Billiton - Rio Tinto merger)
A merged BHP-Rio would control about 40 per cent of the seaborne iron-ore trade, largely due to both the companies having huge mines in Pilbara region of northwest Australia, and are the main suppliers of iron ore to steel mills across Asia.
