BHP tables a $194bn bid for Rio Tinto

<p>BHP Billiton this morning (Wednesday, February 6) formalised a $194bn offer to buy Rio Tinto in what would be the biggest corporate deal ever attempted.</p> <p>The world’s largest mining company has offered 3.4 of its shares for every Rio Tinto share it acquires, a premium on the initial 3-for-1 proposal made in October.</p> <p>The offer is conditional on acceptances of more than 50%.</p> <p>BHP said a US$30bn buyback would take place within a year of the completion of the deal.</p> <p>BHP chief Marius Kloppers said it was the company’s first and only offer, adding that it was a &#8220realistic bid&#8221.</p> <p>The deal is expected to create some US$3.7bn of value within seven years and gives Rio Tinto 44% of the company, up from 36% that BHP originally mooted.</p> <p>Rio Tinto said it &#8220noted the announcement&#8221 and that the boards of the dual-listed company would consider the offer closely before making any further comment.</p> <p>A half an hour later, Rio announced the discovery of a 1bn tonne open-pittable coal resource in South Africa’s Limpopo Province.</p> <p>The BHP-Rio deal is complicated by an earlier transaction this week when Chinalco and Alcoa took control of 9% of Rio by buying 12% of the company’s London-listed stock. </p> <br />