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  1. #1
    Member Viking's Avatar
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    Default RIO - Over $100??

    Any taker to estimate when RIO hit the A$100 bench mark???
    It has been up and down around the 90s for a while now~ it would be quite a psychological boost for the stock or perhaps it is a barrier?
    Make everything as simple as possible, but not simpler.
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  2. #2
    Member Viking's Avatar
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    Exclamation Is the rumor real BHP acquiring RIO?

    They are well over $110 now~ since my last post~ anyway~
    the rumor has it that BHP is acquiring RIO, are they any substance in them?
    I remember someone talking about it a while ago on either the BHP tread of others about this~ but seems the rumor has surfaced again~
    Make everything as simple as possible, but not simpler.
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  3. #3
    F.A.B. Huang Chung's Avatar
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    Default

    As I understand it, European anti-trust rules would probably get in the way of a Rio BHP merger.....but if they promised to divest certain assets, there might be a possibility.

  4. #4
    Member Viking's Avatar
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    How do the European anti-trust coming to their picture? may i ask?
    Make everything as simple as possible, but not simpler.
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  5. #5
    F.A.B. Huang Chung's Avatar
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    Just what I've heard Viking....market domination and all that jazz. Not an expert in the field I'm afraid......

  6. #6
    F.A.B. Huang Chung's Avatar
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    Default

    After a very quick Google Viking....

    Resource Investor 12/5/2007.....'However, the flip side is the anti-trust worries that might arise. Indeed, the Australian government has already stated that it would look very closely at ant-trust issues before giving its approval to any merger between BHP and Rio'.

    The Australian 10/5/2007....'It would be by far the world's largest mining group, and would be the world's largest producer of copper, coking and thermal coal, and rival Brazil's CVRD as the world's largest iron ore producer.
    But it would also create serious anti-trust and trade problems in several countries, and could well require significant divestments of assets, which reduce the benefits of coming together'.

    But on the other hand....

    Forbes 11/5/2007.....There are of course a few good reasons why a takeover wouldn't work. A BHP-Rio combination would have a 40% combined share of the seaborne iron ore market, which would rival market leader CVRD (nyse: RIO - news - people ) of Brazil, which has a similarly sized share.

    Australia's Treasurer, Peter Costello, was quoted by The Associated Press as saying that any bid by BHP would have to be scrutinized. "If BHP wants to make an offer for any company, and I'm not saying whether it will or whether it won't, it would have to pass a number of tests, including competition tests," he told reporters in Canberra. But Lehman Brothers' LaFemina believes antitrust should not be "a major issue."

  7. #7
    Member Viking's Avatar
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    Default

    Thank you so much HC~
    Indeed looking at these quotes in May~ whether speculation of such been fuelling the RIO's rise against the trend these couple of days?
    Make everything as simple as possible, but not simpler.
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  8. #8
    F.A.B. Huang Chung's Avatar
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    Sky Business News said tonight that BHP had recently approached Rio's board, but was rebuffed. Looking to set up another meeting. They must have some ideas as to getting around any competition issues.
    Last edited by Huang Chung; 09-11-2007 at 12:16 AM.

  9. #9
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    Default

    No rumours now. It's official and the 1 for 3 share swap pushed RIO in London up some 20 percent. It's actually equivalent to RIO being $130 plus in the Aussie market. Plus all other miners are up except BHP. Big day tomorrow for producing miners like MCR, SMY, IGO, KZL, ZFX.

  10. #10
    Ramses pa Seti's Avatar
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    Default

    Small error in this article - wouldn't be largest takeover ever. Vodafone's buyout of Mannesmann in 2000 was for £112b.

    BHP Billiton Offers to Buy Rio; Proposal Rejected (Update7)

    By Tan Hwee Ann and Brett Foley

    Nov. 8 (Bloomberg) -- BHP Billiton Ltd., the world's biggest mining company, plans to pursue a takeover of Rio Tinto Group after an earlier approach was rejected, in what would be the largest acquisition in history.
    A purchase of Rio, which has a market value of $159 billion, would create a company that controls more than a third of the iron-ore market, supplies the most energy coal and copper, and owns mines and oilfields in six continents. Rio, the third-largest miner behind Anglo American Plc, surged 21 percent in London trading.
    ``If the name of the game at the moment is resources in the ground, then why pussyfoot with junior or medium-size miners when you can go to the top?'' said Stephen Pope, chief global market strategist at Cantor Fitzgerald Europe in London. ``This deal will happen, it's just a question of time.''
    The combination would be the biggest in a record year for mergers -- the value of transactions through October overtook last year's $3.5 trillion total, according to data compiled by Bloomberg. A successful bid for Rio may eclipse America Online Inc.'s $124 billion purchase of Time Warner Inc. Time Warner is now half the size it was when the deal was completed.
    Rio rejected BHP's three-for-one share offer, worth 4,968 pence after BHP stock declined 5.7 percent today. Rio shares advanced 946 pence to close at a record 5,296 pence. BHP, based in Melbourne and led by Chief Executive Officer Marius Kloppers, said in a statement to the Regulatory News Service it recently wrote to Rio's board with the outline plan.
    Unanimous Decision
    ``It significantly undervalues Rio Tinto and its prospects,'' Rio, which has a dual listing in London and Sydney, said in a separate statement. ``The boards have unanimously rejected the proposal as not being in the best interests of shareholders.''
    The combination would raise antitrust issues, particularly in the iron-ore market, said Charles Bailey, an analyst at Brewin Dolphin Securities in London. BHP, Rio and Brazil's Cia. Vale do Rio Doce control about 80 percent of seaborne trade in the ore.
    Rio, the world's second-largest iron-ore exporter after Vale, may now decide to combine with its Brazilian rival, according to Ian Henderson at JPMorgan Asset Management in London.
    Vale Partner?
    ``I can't conceive a competing bid from another company coming through,'' Henderson, who manages $7 billion in natural- resource assets, said in a phone interview. ``Rio and Cia. Vale do Rio Doce may throw their arms around one another instead.''
    Vale spokesman Fernando Thompson declined to comment.
    BHP's offer sparked a rally in mining shares. The Standard & Poor's 500 Metals and Mining Index, which includes Freeport- McMoRan Copper & Gold Inc., rose as much as 3.5 percent. BHP was the only stock in the Bloomberg Europe Metals and Mining Index to decline today as Anglo American rose 15 percent and Xstrata Plc climbed 11 percent.
    A five-year advance in metals prices has spurred more than 1,448 bids in the mining industry with a value of about $185.7 billion in the past year, according to Bloomberg data.
    Escondida Mine
    A combination of BHP and Rio would have a market value of about $380 billion and annual sales of about $54.6 billion, based on 2006 figures. Anglo American had revenue of $33.1 billion last year.
    The merger's assets would include a stake in Chile's Escondida, the world's largest copper mine, and have operations in uranium, aluminum, diamonds, silver, lead and nickel.
    BHP's assets include Olympic Dam, Australia's largest underground mine acquired as part of the A$9.2 billion purchase of WMC Resources Ltd. in 2005. BHP hasn't made a major acquisition since. The mine's resources include 79 million ounces of gold, making it the fifth-largest deposit in the world.
    Rio, which reported a 43 percent increase in profit last year to $7.44 billion, will become the world's largest aluminum producer this year after agreeing to buy Montreal-based Alcan Inc. for $38.1 billion. The deal, priced at 1.72 times Alcan's revenue, will quadruple Rio's output of the light metal used in planes and car parts. BHP's offer would be worth more than seven times Rio's sales.
    Shareholder Value
    Acquisitions don't always work, according to an Aug. 15 report by Boston Consulting Group Inc. Mergers valued at more than $1 billion destroy twice as much shareholder value as smaller transactions, it said.
    Andrew Pullar, a portfolio manager at Baker Steel Capital Management LLP in London whose $900 million in assets include BHP stock, expressed concern that the potential transaction needs approval from Rio.
    ``If it's going to be hostile, it's going to be a case of paying too much,'' he said.
    Rio hired Morgan Stanley, Macquarie Group Ltd., Credit Suisse Group and NM Rothschild & Sons Ltd. BHP will use Goldman Sachs Group Inc. and Sydney-based Gresham Advisory Partners Ltd., said people briefed on the transaction.
    Do or do not. There is no try. ~ Yoda

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