BHP Billiton less scope to maneuver on Rio bid

Because of the current financial climate, BHP Billiton has expressed the hope that any demands made by the EU competition authorities over its proposed Rio Tinto bid should be manageable.

Posted:  Tuesday , 14 Oct 2008

LONDON (Reuters) - 

Miner BHP Billiton (BLT.L) said on Monday that any demands from European Union competition authorities for its planned takeover of Rio Tinto (RIO.L) must be "very manageable" because the company has less scope for maneuvering under current market conditions.

"We have talked about the EU, that we believe the remedies will be manageable ... I am saying that manageable is the key. If they are not very manageable, you're in a world where it doesn't make sense," Chief Commercial Officer Alberto Calderon told Reuters in an interview. Calderon is also head of the company's takeover team.

"In these types of markets your margin for maneuver reduces by definition ... you have to be much more careful in these times."

The EU has said combining Rio and BHP, the world's second and third biggest iron ore producers, threatens to reduce competition and boost prices.

He said that BHP, the world's biggest mining group, was still enthusiastic about the deal.

There were no problems with a planned $55 billion loan package for the all-share takeover that banks approved before credit markets froze, Calderon said.

Banks have told BHP that the company is the kind of blue chip client to which they will want to lend, he added.

BHP launched a formal all-share takeover bid in February for Rio Tinto (RIO.AX), which has spurned the offer as too low, undervaluing the company and its growth prospects.

BHP has been waiting for approval from competition authorities before it can send out the offer, currently worth about $80 billion, to Rio shareholders.

(Reporting by Eric Onstad)

Jean-Louis Kayitenkore
Procurement Consultant
Gsm:  +250-08470205
Home: +250-55104140
P.O. Box 3867
East Africa
Blog: http://www.cepgl.blogspot.com
Skype ID : Kayisa66

No comments:

Post a Comment