14 February 2008
Rio Tinto: BHP needs to raise offer
BHP Billiton will have to raise its already-sweetened takeover offer "considerably" to lure the miner into talks, a senior Rio Tinto executive said.
Rio Tinto said BHP Billiton’s offer—3.4 of its own shares for every Rio Tinto share for a deal at worth around $147.4 billion—still undervalued the company, according to a report from The Associated Press.
Rio Tinto’s net profit for the calendar year 2007 slipped 1.7% to $7.3 billion, the first decline in its annual earnings since 2003, the world’s third-largest miner said Wednesday from its Australian base in Melbourne.
Underlying profit was $7.4 billion, up 1.4% on the 2006.
The result was above analysts forecasts for an underlying profit between $6.9 billion to $7.1 billion.
Rio Tinto PLC’s iron ore Chief Executive Sam Walsh said BHP Billiton’s offer was not high enough.
“In reality, BHP Billiton hasn’t offered the value that we believe is in the business,” Walsh said. “At a point in time, when BHP comes within ‘cooee,’ we will sit down and talk with them,” he said, using an Australian colloquial term to describe being within shouting distance.
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