The world's largest miner BHP Billiton on Wednesday said it would continue to seek takeover talks with Anglo Australian mining giant Rio Tinto but declined to increase its existing bid.
BHP Billiton said the bid it tabled last month offering three of its shares for one Rio Tinto stock represented "compelling value" for shareholders in the target company.
Rio Tinto has rejected the offer, which values it at more than 130 billion US dollars, and on Tuesday revealed it had asked British regulators to set a deadline forcing its suitor to make a formal bid or back off for six months.
Analysts had predicted BHP Billiton would respond to Rio Tinto's "put-up-or-shut-up" demand with an increased offer but the company instead repeated its assertion that the existing bid was fair.
It said BHP Billiton had stronger growth prospects than Rio Tinto, and its three-for-one offer would give its target 41 percent of the combined entity.
Any argument that Rio Tinto was being undervalued could not be sustained when the relative outlook and performance of the two companies was examined, the company said in a statement to the Australian Stock Exchange (ASX).
"BHP Billiton will continue to seek an opportunity to discuss its proposal with Rio Tinto given the significant incremental value that can only be unlocked through a combination of the two companies," it said.
BHP Billiton's statement was released after the closing bell on the ASX, where its shares fell 1.00 dollar or 2.3 percent to 43.20 dollars and Rio Tinto shed 4.50 dollars or 3.1 percent to 142.00 dollars.
BHP Billiton argues that the merger would achieve massive synergies, particularly in the Western Australian iron ore projects of both companies, through the sharing of port and rail infrastructure and the joint development of new mines.
The merger proposal has met stiff opposition from steel mill customers and particularly Chinese customers, who fear that the merger would give BHP Billiton too much pricing power in the iron ore market.
BHP Billiton said the bid it tabled last month offering three of its shares for one Rio Tinto stock represented "compelling value" for shareholders in the target company.
Rio Tinto has rejected the offer, which values it at more than 130 billion US dollars, and on Tuesday revealed it had asked British regulators to set a deadline forcing its suitor to make a formal bid or back off for six months.
Analysts had predicted BHP Billiton would respond to Rio Tinto's "put-up-or-shut-up" demand with an increased offer but the company instead repeated its assertion that the existing bid was fair.
It said BHP Billiton had stronger growth prospects than Rio Tinto, and its three-for-one offer would give its target 41 percent of the combined entity.
Any argument that Rio Tinto was being undervalued could not be sustained when the relative outlook and performance of the two companies was examined, the company said in a statement to the Australian Stock Exchange (ASX).
"BHP Billiton will continue to seek an opportunity to discuss its proposal with Rio Tinto given the significant incremental value that can only be unlocked through a combination of the two companies," it said.
BHP Billiton's statement was released after the closing bell on the ASX, where its shares fell 1.00 dollar or 2.3 percent to 43.20 dollars and Rio Tinto shed 4.50 dollars or 3.1 percent to 142.00 dollars.
BHP Billiton argues that the merger would achieve massive synergies, particularly in the Western Australian iron ore projects of both companies, through the sharing of port and rail infrastructure and the joint development of new mines.
The merger proposal has met stiff opposition from steel mill customers and particularly Chinese customers, who fear that the merger would give BHP Billiton too much pricing power in the iron ore market.
Via: AFP
