October 07, 2008

BHPB bid for Rio – Rio CEO says rejection on value only

Reuters reported that Rio Tinto recently said that price alone is behind its rejection of BHP Billiton's USD 147 billion hostile takeover offer aimed at assembling a super mining house.

Mr Tom Albanese CEO of Rio said during a lunch with reporters in Australia said that "In these strong market conditions and business conditions, it is not difficult to see different values in these mergers. We rejected BHP's proposal strictly on the basis of value.”

Mr Albanese added that at some point miners run the risks of losing efficiency gains if they enlarge too greatly.

Mr Albanese has long argued BHP's offer of 3.4 of its shares for every Rio share was ballparks away from what his company was worth, but also said that Rio is better off pursuing its own growth paths.