BHP Billiton, the world’s largest mining company, raised its bid for Rio Tinto to more than £70 billion as it emerged that Rio’s new Chinese shareholder was preparing to counterbid.
The battle for control of Rio dramatically intensified last night as BHP launched a hostile offer worth 3.4 shares for every one of Rio’s.
The deal values Rio, the world’s second largest miner, at £54.29 per share, just 5p below its closing price yesterday but shareholders warned last night that the offer may still not be good enough to win support.
Chinalco, the Chinese aluminium producer, and its partner Alcoa, bought a 12 per cent stake in Rio last Friday paying £60 a share. This has effectively set a benchmark price for the company.
However, sources close to Chinalco said that if BHP’s proposal does start gaining favour with shareholders it would re-enter the market to increase its stake.