# BHP takeover of RIO



## Lucky (8 November 2007)

Massive!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aI.icTuREgi4&refer=home

_ Nov. 8 (Bloomberg) -- BHP Billiton Ltd., the world's biggest mining company, said it offered to buy rival Rio Tinto Group, a proposal that was rejected.

BHP, based in Melbourne, said in a statement to the Regulatory News Service it ``recently'' wrote to the Rio board with an outline plan for a merger. BHP has again written to Rio to try to arrange a meeting. Rio stock rallied as much as 25 percent in London, while the company has a current market value of $161 billion.

``The boards of Rio Tinto have given the proposal careful consideration and concluded that it significantly undervalues Rio Tinto and its prospects,'' Rio said in a separate statement. ``The boards have unanimously rejected the proposal as not being in the best interests of shareholders.'' _


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## YOUNG_TRADER (8 November 2007)

Hey guys BHP has made a 1 for 3 script offer to take over RIO,

I reckon this is gonna put a rocket under the Aussie resource sector, hedge funds, Insto's, funds etc will all pour into the sector trying to find the next takeover target,

What are your thoughts guys?


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## reece55 (8 November 2007)

Well, I personally don't think it will have much effect, because the two entities are clearly the largest mining entities on our ASX (and indeed rank up their worldwide) - the proposed takeover is about scale and clearly BHP isn't (in my opinion) going to bother to take over a mid cap entity (like a OXR or ZFX)...

Personally, Xstrata's takeover of JBM was more motivation than that of this transaction - however, this is just my opinion...

Cheers
Reece


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## M34N (8 November 2007)

Will definitely see some very heavy buying in the sector tomorrow after this announcement, will be more interested to see BHP's shares as they have fallen around 1.5% in London trading as at 11:30PM AEST. I remember when RIO had their proposed takeover of Alcan earlier in July, RIO's shares suffered losses of around 2-3% while the rest of the market was up strongly.

No doubt it will push a lot of the whole mining sector up, be curious to see how BHP shares respond here and in the US overnight. I'm mostly interested to see how gold and oil go after this announcement, they have been safe havens in the last couple weeks for traders unsure where to park their money. Doesn't look like  theres been that much movement on the London Metals Exchange in the last hour.

Should be a good day for many tomorrow on the markets.


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## YOUNG_TRADER (8 November 2007)

reece55 said:


> Well, I personally don't think it will have much effect, because the two entities are clearly the largest mining entities on our ASX (and indeed rank up their worldwide) - the proposed takeover is about scale and clearly BHP isn't (in my opinion) going to bother to take over a mid cap entity (like a OXR or ZFX)...
> 
> Personally, Xstrata's takeover of JBM was more motivation than that of this transaction - however, this is just my opinion...
> 
> ...




I agree Reece,

Xstrata's move on JBM was big news as it meant anyone could be next ie OXR, ZFX, etc etc,

But BHP going after RIO will have a huge effect imo as every single hedge fund, fund and Insto will now be convinced that the resource sector is in full M&A swing,

I could be wrong though


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## So_Cynical (8 November 2007)

Ive got no idea what the impact will be..its prob good for the industry.

Would this make BHP the world biggest miner?


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## M34N (8 November 2007)

So_Cynical said:


> Ive got no idea what the impact will be..its prob good for the industry.
> 
> Would this make BHP the world biggest miner?



Way too late, they did that in 2000-01 when they merged with Billiton 

They will become as big of a company as Microsoft, according to reports on Nine MSN.


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## hangseng (9 November 2007)

It will have a major negative impact on a large number of major engineering companies in Aus operating as EPCM. Mark my word on this, I would love to elaborate but can't.

People often can't see past their nose.


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## IOT (9 November 2007)

wow this is huge news!!  can't wait to see the results tomorrorw


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## ta2693 (9 November 2007)

This news reminds me time warner takes over AOL which end technique boom.
I am going to reduce my long position to a very comfortable level.


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## rederob (9 November 2007)

The fat lady is a long way from the stage.
BHP will pursue this one for all it's worth.
And it's worth more than we probably think, because BHP don't play games.
RIO board may have rejected the *first *"offer", but their shareholders will be liking the idea of a 20% plus price premium on a stock that has already run hard over the last few years.
The synergies of integration make considerable sense.  Not only could production costs be reduced, but the entities bargaining power would be supreme.  I have little doubt that BHP's move in part reflects its concerns over China's negotiating tactics with minerals/metals suppliers.  If BHP can gain the whip hand, its proposed merger/takeover with RIO could pay for itself in a matter of years.


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## eMark (9 November 2007)

Correct me if I'm wrong......While I would like to believe that this will fire up the resources sector tommorrow (especially since Young Trader has endorsed it...opinion only of course) Aren't we forgetting something? The BHP/RIO thing may come to nothing market wise if the DOW tanks again tonight?

During the last few weeks the ASX and the DOW have been running there own shows. The ASX hasn't always followed the DOW down, unless of course you have a slide like last night. The Australian economy is going well opposed to the United States, and that's reflected in the sometimes contrasting performances.

Just a thought.

p.s. I own resource stocks


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## vishalt (9 November 2007)

eMark said:


> The BHP/RIO thing may come to nothing market wise if the DOW tanks again tonight?



No it won't lol, Dow can plunge another 300 but it wonts top institutions from selling everything else and running into Rio.


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## eMark (9 November 2007)

vishalt said:


> No it won't lol, Dow can plunge another 300 but it wonts top institutions from selling everything else and running into Rio.




Fair enough.

What other resource stocks do you believe may benefit from the BHP/RIO situation?


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## vishalt (9 November 2007)

With BHP making that sort of a bid, maybe Anglo American, Xstrata, Teck Cominco and CVRD could start making hostile bids for each other?

My strategy for tomorrow: 

Okay this is how it works, BHP and Rio are hand-holders who catch up to each others price, Rio always outperforms BHP in the short-term but BHP starts steaming soon after.

If you're holding Rio, DUMP IT tomorrow and buy only a few more, incase BHP makes a higher offer.

I've checked the premiums now, Rio's P/E has SURGED to 22, while BHP is still below 15, BELOW average, there is a LOT of room to make money in BHP, its a ridiculous discount. 

I'm dumping Rio tomorrow and looking to buy around 2000 shares of BHP.

And hey you never know, Rio could gang up Teck/Xstrata to make a hostile bid for BHP in return - I know that sounds crazy, but BHP making a bid for Rio was NOT conceivable itself in the first place.


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## Gekko (9 November 2007)

This is an easy one to pick. I remember a month or so ago when BHP and Chip Goodyear did an analyst presentation at Credit Suisse in Melbourne. Chip Goodyear was suggesting that were only in the middle of this bull run and that China's internal industrialisation has only just begun - internally, BHP see China's internal expansion and thirst for raw materials lasting for another 20-30yrs. 

They are surely more qualified then all of us (they speak to the customers), and have clearly PUT THEIR MONEY WHERE THEIR MOUTH IS. 

IMO, this is incredible and serves to prove that Australian equities and material equities in particular will significantly outperform gloabl equities for some time yet - decades maybe.

I expect lots of overseas money to begin and continue to flow into our market for the next few months - esp off this news. Plus as YT said, Xstrat/Jubilee etc...


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## YOUNG_TRADER (9 November 2007)

Ummm how did Lucky hijack my thread/poll?

Its now Lucky's thread, hmmmmmmmmmmmmmmmmmmmmmmm 


Also lol 2 people love lamp, lol, for those confused google "ANCHOR MAN" :


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## Sean K (9 November 2007)

YOUNG_TRADER said:


> Ummm how did Lucky hijack my thread/poll?
> 
> Its now Lucky's thread, hmmmmmmmmmmmmmmmmmmmmmmm
> 
> ...



LOL. I moved his new thread to here and it changed it somehow? I'll try and fix it for you YT so you get your little poll back.


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## Rainmaker2000 (9 November 2007)

I think it will have a massive positive effect on the Aussie sector cause it just means a leg up for the smaller players and means more Fortesques in the future.....As for BHP holders, just watch as your company exchanges its own shares with the more overpriced shares of its main rival RIO and pays incredible sums of money to the lawyers and investment bankers.....It sucks to be a BHP holder right now as any entreprenurial zeal is ripped out of BHP as it becomes much closer to a beaurocacy model of operation.....Don't believe it, answer this, if bigger is necessary better, how does a completely new company start up named Fortesque and go from nearly nothing to massive value using assets which were right under the nose of the big players........In any investment, you want to be able to double your money.......how big now does BHP have to be for you to double your money?  Anyway, my 2 cents and go the Aussie Juniors


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## Pager (9 November 2007)

The one thing that sticks out for me is that Insider trading is alive and well, i hope the rlevent authorities will look at yesterdays trading in RIO and who were buying big parcels of the stock.


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## Kauri (9 November 2007)

vishalt said:


> With BHP making that sort of a bid, maybe Anglo American, Xstrata, Teck Cominco and CVRD could start making hostile bids for each other?
> 
> My strategy for tomorrow:
> 
> ...




  From what I have seen over the years in takeovers the first offer is rarely the best and/or last offer.. also the target companies shares invariably rise, usually to above the offer value in anticipation of a better offer, and the company bidding usually loses value, initially at least. 
Cheers
........Kauri


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## mick2006 (9 November 2007)

I have to hand it to the management at BHP, they tried the quiet merger approach with Rio, knowing they were likely to fail, and now by announcing to the general market their failed attempt they will be putting pressure on the Rio board to at least discuss the offer from BHP or suffer the wrath of their own shareholders, who will feel there is some easy money to be made.

Don't think for one minute BHP expected to win Rio with the first offer, BHP would have a more realistic price of somewhere between $140-160 per share in mind.

All they have really done now is let everyone know RIO is in play and one way or another the deal will be done, with or without the help of the RIO board.


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## long$$ (9 November 2007)

If BHP go for RIO as hard as RIO went for Alcan, 3:1 opening bid would surely go  higher. Would the Brazilians make a bid? Chinese with their big sovereign fund? Would provide some competition.

Would the 3:1 ratio also apply in Australia or would there be a variation depending upon the relative values in UK and Oz?


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## nizar (9 November 2007)

Is anybody suprised that RIO's response came so quickly?

Normally the target company like has a meeting first or whatever and I've actually never seen or heard of a same day response.

By the time I heard the news of the offer last night I already knew about the response!

Any thoughts??


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## nizar (9 November 2007)

Pager said:


> The one thing that sticks out for me is that Insider trading is alive and well, i hope the rlevent authorities will look at yesterdays trading in RIO and who were buying big parcels of the stock.




And yes, it is weird how RIO closed higher yesterday when everything else got absolutely hammered


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## YOUNG_TRADER (9 November 2007)

kennas said:


> LOL. I moved his new thread to here and it changed it somehow? I'll try and fix it for you YT so you get your little poll back.




*I LOVE LAMP * Kennas! And I'm not alone on this poll either!!!!!!!! :


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## Garpal Gumnut (9 November 2007)

Do I need any health checks before ticking "I love lamp" . Sorry , what does it mean ??

gg


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## YOUNG_TRADER (9 November 2007)

nizar said:


> And yes, it is weird how RIO closed higher yesterday when everything else got absolutely hammered




Stinks of insiders doesn't it Niz? Absolutely reaks of them! Lets see what ASX/ASIC do, sweet duck all I'd say


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## YOUNG_TRADER (9 November 2007)

Garpal Gumnut said:


> Do I need any health checks before ticking "I love lamp" . Sorry , what does it mean ??
> 
> gg




He he he heeeee http://www.youtube.com/watch?v=cnGvLSBL20g

Also see http://www.youtube.com/watch?v=ai3tWw66eas


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## doogie_goes_off (9 November 2007)

Have FMG just jumped on the takeover wave? or is there something fundamental I'm missing. Does the rejection from RIO see BHP look elsewhere in the first instance or would thiss be after all avenues were closed? Market analysts help me out!


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## imitrust (9 November 2007)

When BHP Limited and Billiton Plc merged in 2001, part of the medium-term plan was strategising a takeover of other assets like Xstrata and Rio Tinto.

In other words, this has always been on the cards but it's taken them a while to pull their finger out.


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## Sean K (9 November 2007)

1128 [Dow Jones] Brazil's CVRD (RIO) and Australia's Fortescue Metals (FMG.AU) may benefit from possible divestments from a combined BHP (BHP.AU) and Rio Tinto (RIO.AU), says Campbell McComb, who manages A$230 million at Armytage Private in Melbourne. "Other mid-sized businesses that are cashed up and not leveraged on their balance sheet would have the ability to step in and buy assets that are forced to be sold," he says. "The combination makes sense with both companies in similar resources and in similar (geographic) areas," McComb says. He doesn't think BHP would have trouble raising cash to fund a bid, "looking at the combined group and the size and spread of assets it would have...in this market with resources and the predictions people have in the next two to three years, BHP could do it easily." BHP down 0.7% at A$42.98; Rio Tinto up 16% at A$131.20.(ABH) 

1132 [Dow Jones] BHP Billiton (BHP.AU) adding cash sweetener for Rio Tinto (RIO.AU) bid would be difficult, given scale of acquisition, as any LBO debt would require massive liquidity, debt managers say. Citing global credit blow out, say BHP would be unable to source sufficent funding in Australia, need to fund offshore, but note widening spreads mean debt likely expensive. (EGC) 

1138 [Dow Jones] BHP's (BHP.AU) bid for Rio Tinto (RIO.AU) reflects the company's outlook for world growth, profitability and commodity prices, says Hans Kunnen, who helps manage A$130 billion in equities at Colonial First State Investments. "It's a message from BHP the world growth story isn't over and commodities cycle will continue for a while," says Kunnen, who holds shares in both companies. "BHP wants to profit from that and this is one of the ways forward," he says. If BHP did acquire Rio Tinto "it won't put it the driving seat" to demand higher commodity prices "but it will lift its bargaining power," Kunnen says. (ABH) 

1146 [Dow Jones] Biggest threat to BHP Billiton (BHP.AU) tilt at Rio Tinto (RIO.AU) is Rio Tinto "doing a WMC Resources" and spin off businesses to create shareholder value, says ANZ analyst Mark Pervan. Rio Tinto's iron ore business as separate entity would represent "huge value." Discounts counter bids from other large caps as unlikely given size of the deal, antitrust issues on iron ore for CVRD (RIO). Adds competition issue not insurmountable hurdle, since BHP/Rio Tinto would be largest but not overly dominant producer of iron ore, copper, aluminum, thermal coal. (EFB) 

1223 [Dow Jones] Rio Tinto (RIO.AU) up 16% at A$131.60, fades from record high of A$138.10 as many traders who bought on the takeover rumor recently are taking profits. "It's just going to take so long," says senior trader. "You are best to leave it alone and think about it later." But arbs providing good support on dips toward A$130.00. Three BHP for one RIO should be the floor, currently A$128.67. Rio bid is attracting plenty of demand for other resource stocks, with Fortescue (FMG.AU) up 15%, Alumina (AWC.AU) up 5.9%, Zinifex (ZFX.AU) up 5.1%, Oxiana (OXR.AU) up 3.9%, Oil Search (OSH.AU) up 4.1%. (DWR)


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## sassa (9 November 2007)

Just read this article on the "proposed" merger of BHP and Rio Tinto.Am particularly interested if anybody knows of any regulatory issues that would stop the takeover and reasons why the government might use its National Interest Powers to also prevent its occurrence. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAc82gy13pMo&refer=home


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## Sean K (9 November 2007)

sassa said:


> Just read this article on the "proposed" merger of BHP and Rio Tinto.Am particularly interested if anybody knows of any regulatory issues that would stop the takeover and reasons why the government might use its National Interest Powers to also prevent its occurrence.
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aAc82gy13pMo&refer=home



I don't think the Gov has any case in point here. BHP and RIO are international companies and there is no national competition/soverienty issues to deconflict. The only reason the Gov would be looking at it would be to make themselves feel important. Although, what would I know.


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## YOUNG_TRADER (9 November 2007)

kennas said:


> I don't think the Gov has any case in point here. BHP and RIO are international companies and there is no national competition/soverienty issues to deconflict. The only reason the Gov would be looking at it would be to make themselves feel important. Although, what would I know.




Hey Kenna,

I disagree, when BHP merged with Billiton there were alot of issues re Foreign Policy etc,

The only way Aus govt let merger go through was for BHP to have its head office stay in Melb and the registry to stay in Aus,

So I'm sure they will look at it


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## M34N (9 November 2007)

Pager said:


> The one thing that sticks out for me is that Insider trading is alive and well, i hope the rlevent authorities will look at yesterdays trading in RIO and who were buying big parcels of the stock.



Couldn't agree more, mate! 

I suggested the same thing in another thread last night when I heard the news, and when I heard the announcement, it kind of stood out to me why RIO was up. Clearly there was something going on because, if you actually went through the trades, you could see it was large cap investing and not just "mum and dad" investors pushing up the price.

There clearly should be an investigation into what happened, if no-one is guilty of anything then there should be no reason to hide and not investigate.


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## brodion (9 November 2007)

Does anybody know where BHP will go from here.how do takeovers affect both stock prices???????????????


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## waz (9 November 2007)

Hang on a sec.

Does this fit the definition of a takeover or a merger? If it is 3 for 1, no actual cash is being transferred. Its just a conversion, nothing is being sold.

Takeover is fancy word which is overused to sell news stories. 
(and make your asf post attract more attention, ie. you dont just have big news, you have really big news)

RIO has exceptional management, in a takeover you would expect them all to vanish once the deal is done as they have bad management, which is why a takeover is made, the takeover party feels they have better managment to better make use of the targets assets. In a merger it will be a mix of bhp and rio management who can both make better use of each others assets.

It would be no different to rio approaching bhp and saying 'i will give you 1 rio share for every 3 of your bhp shares'. In any merger, one party has to make the first approach. ie, the phone call, letter.

In a merger your would expect the combined value of both companies to increase, which is what happened today.

This fits my definition of merger. Any thoughts. Im happy for us to discuss the difference between a takeover and a merger.


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## sassa (9 November 2007)

A comment in The Times tonight-

In rejecting the proposal, Rio said it had given it careful consideration but “concluded that it significantly undervalues Rio Tinto and its prospects”. One person with knowledge of the talks said the offer was “a million miles away” from one that Rio would contemplate. “What they have put forward is a skinny premium . . . it’s a long way away from the kind of value that would be sensible.”


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## sassa (9 November 2007)

Kauri said:


> From what I have seen over the years in takeovers the first offer is rarely the best and/or last offer.. also the target companies shares invariably rise, usually to above the offer value in anticipation of a better offer, and the company bidding usually loses value, initially at least.
> Cheers
> ........Kauri




Reading your above analysis,is it unusual for both BHP and Rio shares to be both trading higher on the London Exchange tonight?


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## ta2693 (9 November 2007)

I want to vote but what does "I love lamp" mean?


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## stoxclimber (10 November 2007)

Well, it means that you love, that is to say, you have great affection for, a great attraction for, lamp.


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## ta2693 (10 November 2007)

stoxclimber said:


> Well, it means that you love, that is to say, you have great affection for, a great attraction for, lamp.




what does that imply? How does "I love lamp" related to the vote?


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## bvbfan (10 November 2007)

Watch the Anchorman movie or maybe the part is on Youtube



I would have voted for Lamp too but this deal will be huge if it goes through.


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## Nyden (10 November 2007)

I think RIO is being selfish rejecting this offer; don't they see that we need some action on the ASX to keep us distracted from the US markets?! 

In all seriousness though; what exactly are RIO holding out for? An offer worth $200? Heck, they're only sitting on 130 because of the premium offered; if it all falls through...I'm quite sure it wont sit there 

Can't claim prospects for the next 10 years as already realised, a lot of things can happen.

What do RIO holders feel though? Did you ladies/gents find it reasonable, or unacceptable? I shall check out the RIO thread 

I would have thought a premium as large as that would be great for a stock as large as this


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## Kauri (10 November 2007)

I personally can't see RIO going for less than $151.15 cash or equivelant...minimum.. Other mobs have been casting their eyes at Rio, now that Alcan is fait accompli see who else comes out of the woodwork... the Chinese... XStrata/Glencore.... Yilgarn Mining??? Even in the very unlikely chance that no-one else bids up the auction action, BHP will end up paying $151.15 absolute minimum... I think..  I hold.... and wait..  
Cheers
........Kauri


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## Sean K (10 November 2007)

Kauri said:


> Other mobs have been casting their eyes at Rio, now that Alcan is fait accompli see who else comes out of the woodwork... .... Yilgarn Mining???



Is that a ramp?  LOL

No word from the Budgie Kauri? Or, is that where you get the $151.15 from?


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## nizar (10 November 2007)

Isn't it weird how RIO didn't even put the offer before shareholders??


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## Sean K (10 November 2007)

nizar said:


> Isn't it weird how RIO didn't even put the offer before shareholders??



They must be pretty confident of a higher bid in this environment, and been sure that BHP would out the proposal and go hostile. Bit of a risk, but the RIO shareholders will be thanking them...


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## long$$ (10 November 2007)

Folks, after reading story in this today's SMH it seems that both RIO and BHP are being shortchanged on price because the large Chinese steelmakers are selling their low cost contract price iron ore to smaller steelmakers on the spot market at multiple contract price. 
So it seems to me that the fierce resistance of the Chinese to price rises and adjustments for transport is knocking value off both companies while the Chinese rake in profit that should be BHP/RIOs. The BHP/RIO takeover could be a way of merging that minimises (but would by no means eliminate) Chinese objections, and improves BHP/RIOs bargaining position on price.
But what would I know.https://www.aussiestockforums.com/forums/images/smilies/2twocents.gif


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## Fab (10 November 2007)

Just wondering why BHP share price is dropping at the moment. Is it likely to go back up strongly if and when the merger happens ?


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## overule (10 November 2007)

I am confident that BHP's Share price will bounce back nicely. Filling up while it's dropping.


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## Fab (10 November 2007)

overule said:


> I am confident that BHP's Share price will bounce back nicely. Filling up while it's dropping.




Is it wishful thinking or do you have some reason of thinking that way ???


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## overule (10 November 2007)

BHP might drop in the short term but it still has good future with the never-ending boom in China and India.

I am a long term BHP holder and i see no problem ahead.


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## Nyden (10 November 2007)

overule said:


> BHP might drop in the short term but it still has good future with the never-ending boom in China and India.
> 
> I am a long term BHP holder and i see no problem ahead.




Sorry, but there's no such thing as a never-ending boom :
I believe BHP have gotten themselves into a mess now - if the attempt fails; they go down. If it succeeds - the price they'll pay may be too high for traders to feel comfortable with.


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## stockwhizben (11 November 2007)

im keeping my bhp and rio long term. i've been filing away contract notes today and cant believe the now low prices i have been buying and selling these for over the last couple of months. wish i held on to more rio's. kicking myself
so now i think i'll go with a buy and hold strategy for the big guys and do more short term trading for specs. big learning process for me


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## nizar (11 November 2007)

stockwhizben said:


> so now i think i'll go with a buy and hold strategy for the big guys and do more short term trading for specs. big learning process for me




Just trade the share price.
A share price going up is no reason to sell.

Maybe its the specs that you should be holding onto since they are the ones with multibagger potential?

But once again, just trade the share price.

Don't complicate whats essentially quite simple.


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## greenfs (11 November 2007)

My son in law is a Rio employee. He told me yesterday that they did a poll of all Rio GM's and it clearly indicated that the deal is as good as done, subject to BHP coming back with the right revised offer ($160+).

If BHP is stupid enough not to offer the premium they believe that someone else will do it.


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## Rainmaker2000 (11 November 2007)

Greenfs, that sounds about right although even when BHP comes back with that higher offer and assuming the boards accepts, there will still be a hefty premium on the RIO price cause another bidder is not out of the question.....Even though I think all this is hitting bubble proportions, RIO's assets are far more strategic than even BHP's...its just that BHP has more of them...its possible China will get pissed off with negotiating with these elephants and take matters into their own hands and make a bid............

Another thing, people are wondering why BHP's price is going down....takeovers almost always happen like this........Each of BHPs shares are becoming less and less valuable as the company desperately scrambles to exchange more your shareholding to RIO holders......in paying a big premium, BHP is devaluing their own shares.....of course they think long term its worth it


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## sassa (11 November 2007)

Why aren't the American investors interested?Rio shares lost 3.4% on Friday and BHP 1.35%.


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## M34N (11 November 2007)

sassa said:


> Why aren't the American investors interested?Rio shares lost 3.4% on Friday and BHP 1.35%.



Rio was up over 8% in New York and 6.5% in London trading Friday. You are right about BHP shares being down though, which is no surprise. BHP will most likely bounce back sometime this week though, it was up strongly (over 5%) in London trading before it pulled back.


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## DB008 (11 November 2007)

People are talking ab out BHP hitting $100 soon. Can't wait for that to happen.


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## overule (11 November 2007)

I am sure BHP will bounce back nicely in the long-term.


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## sassa (11 November 2007)

M34N said:


> Rio was up over 8% in New York and 6.5% in London trading Friday. You are right about BHP shares being down though, which is no surprise. BHP will most likely bounce back sometime this week though, it was up strongly (over 5%) in London trading before it pulled back.




Hi M34N.We must have conflicting information.

http://www.nyse.com/about/listed/quickquote.html?ticker=rio tinto


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## overule (11 November 2007)

sassa said:


> Hi M34N.We must have conflicting information.
> 
> http://www.nyse.com/about/listed/quickquote.html?ticker=rio tinto




That's not RIO TINTO..

http://www.nyse.com/about/listed/lcddata.html?ticker=RTP


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## M34N (11 November 2007)

sassa said:


> Hi M34N.We must have conflicting information.
> 
> http://www.nyse.com/about/listed/quickquote.html?ticker=rio tinto



RIO on the NYSE is Brazillian company Companhia Vale do Rio Doce (CVRD).

Rio Tinto trades as RTP on the NYSE.


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## Kauri (16 November 2007)

and I am told that a rumour is picking up that RIO may counter-bid for BHP...  
Cheers
.........Kauri


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## mayk (16 November 2007)

http://www.bloomberg.com/apps/news?pid=20601081&sid=a1Cc_z.oz13w&refer=australia


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## Moneybags (16 November 2007)

Kauri said:


> and I am told that a rumour is picking up that RIO may counter-bid for BHP...
> Cheers
> .........Kauri




Now that would be something. Sure would be nice to see my BHP shares soar like RIO shares have done recently.

MB


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## angry-beaver (19 November 2007)

I see our freind "Twiggy" is trying to upset the apple cart with the opening of the BHP and Rio's rail lines should the merger be approved.
Surprised to see that this hasnt cause some changes to Rio's share price?
Opening the lines to 3rd parties is an extreem risk for BHP and Rio 

Rio and BHP took the risk years ago to instal these lines at their own cost and paying royalties to the relevent parties to cross there land.
They are in the mist of expanding the mines to meet demand which in turn will increase rail use.
Throwing anyone else on the line serverly puts this at risk and planning trains currently is hard enough within one company.

Hope "Twiggy" is going to open his lines up for everyone as well?


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## vishalt (19 November 2007)

angry-beaver said:


> Hope "Twiggy" is going to open his lines up for everyone as well?




That sounds like a really bad thing to me. These are BHP and Rio's on lines, I don't understand how Fortescue gets access to them. This means slower deliveries of iron ore, hence slower exports because theres going to be Fortescue's own shipments hogging the line. 

Opening it up to everyone else lol.. even worse


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## vishalt (6 February 2008)

*BHP raises RIO bid to 3.4 shares*



			
				Bloomberg said:
			
		

> BHP Raises Takeover for Rio Tinto, Offers 3.4 Shares (Update1)
> 
> By Rebecca Keenan
> 
> ...




Rio will surge on this!


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## agro (6 February 2008)

*Re: BHP RAISES RIO BID TO 3.4/SHARE*

Fingers Crossed They Accept the revised offer

they won Western Mining and i am tipping they repeat their success..

the chinese who took a stake were doing it purly for investment purposes (not to block and bids)..


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## The Mint Man (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



vishalt said:


> Rio will surge on this!



when:


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## Nyden (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

If RIO opens at 120 I might buy a heap; 3.4 * 39 is 132! I can't be bothered reading the announcement though; is the offer actually formal yet? Hostile, or accepted, or ...


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## The Mint Man (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

Surely they will go to around $132..... $120 would be quite a drop considering there is a company (BHP) saying that they will pay $132


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## Nyden (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



The Mint Man said:


> Surely they will go to around $132..... $120 would be quite a drop considering there is a company (BHP) saying that they will pay $132




Yes, but shhh - I wanted a sure-thing bargain.

No, they won't be paying 132, they'll be offering shares :
If BHP tanks ... so will Rio


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## The Mint Man (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

Gees, always gotta watch what you say around here. hahaha


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## Nyden (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



The Mint Man said:


> Gees, always gotta watch what you say around here. hahaha




Indicative price of 37 for BHP .. that means an open of 125 for Rio, or they're over-priced :

Edit; wouldn't call a .7% increase in Rio a surge :


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## Awesomandy (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

It looks like, instead of RIO's sp going up to 3.4x of BHP, we have BHP's sp dropping to match 29.41% of RIO's sp.


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## treefrog (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

BHP results (today) starting to reflect the effects of a little easing in global growth as growth trims back
likely to inject a little more sober reflection into the takover offer
thinks we'll see more BHP price downside over coming weeks


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## Pager (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

Looks like BHP clearly wont be overpaying for RIO, they have offered a premium to what RIO was trading at before the bid (about 2.8 BHP to 1 RIO)and know the RIO board have a hard choice to make.


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## Nyden (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

That's better. Rio had no business in being in the green today! : 

It's still overpriced by a dollar or so ... based on 3.4 * BHP's SP
Why would that be? People hoping for a rise in BHP? Buy BHP then? 

Hoping for an increased offer? Meh ... won't happen.


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## tigerboi (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

everyone has forgotten 1 thing:ACCC...unless there has been a nod & wink

agreement from the accc then surley on competition grounds it wont be

allowed,if so the 4 banks will scream blue murder,toll v patricks had to make

them ride shotgun as asciano,firstly i think rio wont accept & it wont get

past the accc.....tb


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## tigerboi (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



tigerboi said:


> everyone has forgotten 1 thing:ACCC...unless there has been a nod & wink
> 
> agreement from the accc then surley on competition grounds it wont be
> 
> ...




surely is the proper way....


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## Nyden (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



tigerboi said:


> everyone has forgotten 1 thing:ACCC...unless there has been a nod & wink
> 
> agreement from the accc then surley on competition grounds it wont be
> 
> ...




& If that happens ... BHP continues to drop based on less polished earnings, Rio plummets back to -90c ... who wins there? :


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## numbercruncher (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*



Nyden said:


> & If that happens ... BHP continues to drop based on less polished earnings, Rio plummets back to -90c ... who wins there? :





BHP wins by avoiding over paying for a company priced on boom time profits


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## cordelia (6 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

*BHP Billiton 'A1/P-1' ratings on review for downgrade on Rio Tinto bid - Moody's*

read it here:

http://www.hemscott.com/news/latest-news/item.do?newsId=59534689175084


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## mayk (7 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

Rio Tinto rejects latest BHP Billiton bid

http://www.marketwatch.com/news/sto...3C-4788-99A7-74AAFD7171DF}&dist=TQP_Mod_mktwN


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## tigerboi (7 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

rio just anns.1 hour ago of a 3bn ore find in the pilbara,as i said yesterday

3.4 shares not enough & accc may not approve..


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## tigerboi (7 February 2008)

*Re: BHP raises RIO bid to 3.4 shares*

here is a story on the bhp/rio battle from yesterdays resource investor...tb


BHP Launches $147.4B Hostile Bid for Rio Tinto; Will Chalco Make a Move? 

By Jane Louis
06 Feb 2008 at 06:17 AM GMT-05:00


CAPE TOWN (ResourceInvestor.com) -- BHP Billiton [NYSE:BHP; LSE:BLT; ASX:BHP] has launched a $147.4 billion hostile takeover offer for rival Rio Tinto [NYSE:RTP; LSE:RIO; ASX:RIO] today. If the bid is accepted, it would create the third-largest company in the world, which has already raised concerns among competitors - especially Chinese companies - that a combined BHP-Rio Tinto would have too much strength in the pricing of iron-ore and other commodities.

Today’s bid of 3.4 BHP shares for every Rio share represents a 13% improvement over BHP’s original three-for-one friendly share offer in November. BHP may face a roadblock, however, from a surprise move Friday in which Aluminum Corp. of China (Chalco) [NYSE:ACH] partnered up with Alcoa [NYSE:AA] to buy shares in Rio worth $14 billion, making it the company’s largest shareholder. Chinese companies have been particularly vocal in their concerns over the expected power of a combined BHP-Rio Tinto, and rumours have been floating about that Chalco could make a rival bid. 

Rio rejected BHP’s original bid, saying it was too low. The company declined to comment on today’s sweetened offer at the Mining Indaba in Cape Town, South Africa.

“We have no comment at this time,” Jean Chawapiwa-Pama, a spokesperson for Rio's communications and external affairs in Africa, told Resource Investor. “We have received the offer, and the board is reviewing it.”

A Force to Be Reckoned

London-based Rio Tinto produces iron ore, coal, copper, bauxite, alumina, aluminium, uranium and diamonds and holds operations in Australia, North America, South America, Asia, Europe and Africa. Its two biggest revenue makers in the year ended December 2006 were iron ore and copper, bringing in about $7 billion. Energy commodities and aluminium each produced about $4 billion.

BHP, based in Melbourne, has more than 100 operations worldwide and produces aluminium, base metals, iron ore, diamonds and specialty products, manganese, coal, petroleum and stainless steel materials. The company made $6.9 billion last year on stainless steel production. Petroleum, base metals and aluminium brought in about $6 billion each, while iron ore made $2.7 billion.

The deal between two of the top three iron ore producers would create a global force in iron ore output. Rio produced 132.78 million tonnes of iron ore in the year ended December 2006, while BHP had an output of 98.197 million tonnes in the year ended July 2007. A combined Rio/BHP company would hold 27% of the world market for iron ore, matching the production of rival and world leader Vale [NYSE:RIO].

A common theme at the Mining Indaba has been China and India’s growing economies. As these emerging countries continue to develop, their resource needs will continue to boom. China, in particular, currently has a skyrocketing demand for stainless steel and iron-ore, and India’s GDP growth is increasing at a rate about 10 to 15 years behind China, meaning that demand will stay strong in the country throughout the coming decades.

A Possible Bid from China?

Chalco’s share increase on Friday led analysts to speculate that the company may be planning a bid of its own. The aluminium giant has yet to make a statement, and sources said it may not be in any hurry.

Giles Taylor, co-head of the mining and metals team at Barclays Capital, told RI that while he couldn’t comment on the offer itself, the unsolicited bid from BHP and Chalco’s share boost make it an interesting story.

“I think it’s quite a clever strategy,” he said.

Taylor said consolidation is going to continue being a main theme in the mining sector. While mergers and acquisitions used to be about diversifying assets, now it’s about adding capital and synergies.

“That has never happened before in the industry,” he said. He said like everyone else, Barclays will have to wait and see what happens.

BHP lost $3 yesterday to close at $69.48 on the NYSE, while Rio Tinto lost $10.66 to close at $421.50.


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## Pager (7 April 2008)

*Re: BHP raises RIO bid to 3.4 shares*

Been a while with no news about were the bid is going, so what happens next 

Is there any time condition on BHP,s offer ?, at what point is it a non starter or could this drag on and on ?.


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