Canberra, Australia — MININGREVIEW.COM — 19 September 2008 – The hostile US$111 billion (R832 billion) bid for the rival Rio Tinto Group by BHP Billiton – the world’s largest mining company – has become more attractive amid the current uncertainty in global financial markets.
This was the view expressed by BHP Billiton chief executive Marius Kloppers in an interview here with Bloomberg News. “We view this transaction, if anything, as more attractive under these slightly more uncertain circumstances,” he said. “It’s a deal for all seasons. In difficult times like this, people value cost savings, synergies and cash flow benefits.”
Bloomberg reports that about US$3.6 trillion (R27 trillion) of market value was erased from global stocks this week by yesterday, triggered by the bankruptcy filing by Lehman Brothers Holdings Incorporated. It added that Rio’s shares in Sydney this week traded at a record discount to BHP’s takeover bid, signaling concern among investors that the world’s largest mining acquisition may fail.
“The way the Rio Tinto share has traded compared to ours underscores our point quite well,” Kloppers said. “We find it very difficult to see, at that 45% premium uplift we have offered Rio Tinto shareholders, they could match this on a stand-alone basis.”
Kloppers ended by saying: “global demand for BHP resources is still very, very robust.”