BHP lines up $70 bln finance package from Citi -FT

[Catdaddy]

BHP lines up $70 bln finance package from Citi -FT
www.reuters.com/article/marketsNews/idUKL103029420071110?rpc=44
Sat Nov 10, 2007 9:02am EST

LONDON, Nov 10 (Reuters) - BHP Billiton (BLT.L: Quote, Profile, Research) has lined up a $70 billion financing package to bolster its $140 billion takeover approach for rival miner Rio Tinto (RIO.L: Quote, Profile, Research), the Financial Times said on Saturday.

Rio rejected the all-share offer from BHP Billiton on Thursday, saying it was too low. But there is speculation BHP will sweeten its offer, which helped boost Rio shares for a second day on Friday.

The FT, quoting market sources, said BHP's arrangement of debt facilities through U.S. bank Citigroup (C.N: Quote, Profile, Research) indicated it may make a hostile bid.
BHP declined to comment and Citigroup could not immediately be reached for comment.

Rio's board is open to a higher BHP approach and other offers, a source familiar with the matter told Reuters on Friday.

A marriage of BHP (BLT.AX: Quote, Profile, Research) and Rio (RIO.AX: Quote, Profile, Research) would create the world's biggest mining force, capable of controlling the global flow of loads of iron ore, copper, coal and other commodities for industrial use.

Analysts said the BHP approach may be just the first shot in a battle that could draw in other parties and push the bidding for Rio above $170 billion.

For details click on [nSYD118925].

(Additional reporting by Eleanor Wason)

(Reporting by Steve Slater, Editing by Peter Blackburn)



© Reuters2007All rights reserved

[imSINGLEruRICH]

Interesting... very interesting....

do we have an emotiocon that is kneeling & praying??


Single

[Catdaddy]

A FOLLOW-UP...

BHP May Need to Offer 60% Premium to Buy Rival Rio (Update1)
By Tan Hwee Ann

Nov. 11 (Bloomberg) -- BHP Billiton Ltd., the world's largest mining company, may need to offer a 60 percent premium to buy Rio Tinto Group, Perennial Investment Partners Ltd. said.

``Perhaps that's the price to get a friendly merger,'' Ken West at Melbourne-based Perennial Investment, which manages A$20 billion ($18 billion), including Rio shares, said in an interview shown on the Australian Broadcasting Corp. today. Rio paid a similar premium to buy Alcan Inc. for $38.1 billion, he said.

Rio won't consider any bid below 70 pounds ($146) a share, The Times of London said today, citing unidentified people close to the third-largest mining company. That's a 61 percent premium to the stock's price before Melbourne-based BHP said Nov. 8 Rio had rejected an indicative three-for-one share offer.

The proposed takeover, which may be the world's largest, underscores BHP Chief Executive Marius Kloppers's prediction that a five-year rally in commodities will be sustained. BHP may need to add cash to its offer, investors said.

Rio rose to a record in London and Sydney trading on Nov. 9, valuing the company at $172 billion. Rio's closing price of 5,624 pence in London is 15 percent more than BHP's proposed offer. BHP fell 1.7 percent in London.

Samantha Evans, a spokeswoman for BHP, declined to comment today. Ian Head, a spokesman for London-based Rio Tinto, also declined to comment.

`Cash Alternative'

BHP will pursue talks with Rio, the company said in the Nov. 8 statement. The bid ``significantly undervalues Rio Tinto and its prospects,'' Rio said in a separate statement the same day.

BHP is arranging a $70 billion loan through Citigroup Inc., and may use $30 billion as a cash sweetener for Rio investors, the Times said, without citing anybody.

``They'll have to give a cash alternative,'' said Ray Chantry, an analyst at E.L. & C. Baillieu Stockbroking, in the same ABC interview. ``Fund managers certainly want a scrip alternative, but some will want cash.''

The merged company's assets would include a stake in Chile's Escondida, the world's largest copper mine, and operations in uranium, aluminum, diamonds, lead and nickel. It may generate between $3 billion to $5 billion in pretax cost savings, and a friendly bid would create the most value, UBS AG said last week.

Combining BHP and Rio, which just bought aluminum producer Alcan, would create a company with estimated net income of as much as $26 billion, said Tony Robson, co-head of mining research at BMO Capital Markets.

It would have a market value of $379 billion at Friday's closing prices in Sydney and London and would have more than a third of the iron-ore market, the most energy coal and copper reserves, and operations in six continents.

``This is unquestionably about buying existing assets and leveraging off China and India for the next 15 years,'' said Baillieu's Chantry. ``There's a strong project pipeline within Rio Tinto.''

To contact the reporter on this story: Tan Hwee Ann in Melbourne on [e-mail]

Last Updated: November 10, 2007 23:24 EST

[Catdaddy]

ANOTHER TIDBIT...


BHP reportedly considers sale of unit
Sun Nov 11, 2007 8:46am EST

LONDON (Reuters) - BHP Billiton (BLT.L: Quote, Profile, Research) (BHP.AX: Quote, Profile, Research), the world's biggest mining group, is considering the sale of one of its largest units, BHP Petroleum, to help finance a hostile takeover of Rio Tinto (RIO.L: Quote, Profile, Research) (RIO.AX: Quote, Profile, Research), the Sunday Times newspaper said.

BHP's financial advisers Goldman Sachs and Citigroup, have flown to China to sound out potential bidders for the subsidiary which could be worth more than 20 billion pounds. There would also be interest in the oil and gas fields from other international buyers, the paper said.

BHP on Thursday approached third-ranking world mining group Rio with an all-share takeover offer worth $140 billion aimed at creating a $350-billion-plus mining giant, but Rio was quick to rebuff the 3-for-1 share offer as too low.

The paper added that BHP is considering whether to table a hostile all-paper bid for Rio, but sources close to Rio say the board is unlikely to entertain an offer below 70 pounds a share, compared with the 48 pound value of the current BHP proposal.

Another newspaper, the Financial Mail on Sunday, said that BHP is considering injecting a significant cash element into its offer for Rio and is believed to be negotiating a loan of up to 33 billion pounds to allow it to sweeten its bid with cash.

Meanwhile the Sunday Telegraph newspaper said the state-owned China Development Bank has taken a stake of less than 1 percent in Rio in a sign that China may intervene in the bid battle as China consumes nearly 50 percent of world iron ore production, while the two miners together would control almost 40 percent of production.
Spokesmen for both BHP and Rio declined to comment.

($1=.4736 pounds)

(Reporting by David Jones; Editing by Greg Mahlich)



© Reuters2007All rights reserved

[Catdaddy]

Another article from another part of the world...


BHP Billiton sees $3.5 bln savings in Rio deal: paper
Sun Nov 11, 2007 5:59pm EST More Business & Investing News...

SYDNEY (Reuters) - BHP Billiton Ltd/Plc (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) is targeting cost savings of at least $3.5 billion (1.68 billion pounds) from a merger with Rio Tinto (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research), the Australian Financial Review reported on Monday.

The business daily, citing a letter from BHP's chairman to his Rio counterpart, said most of the savings would come from rationalising port and rail infrastructure in the Pilbara iron ore mining region of western Australia.

The savings would be achieved progressively, with the full $3.5 billion flowing through to earnings by 2013, the paper said.

Rio has rejected a $140 billion takeover offer from BHP, a move that is likely to trigger rival bids from resource companies awash with cash from record commodity and stock prices.

British newspapers reported over the weekend that BHP may be considering selling its petroleum business for $40 billion to help fund a Rio bid, while it has also lined up a $70 billion financing package.

The Australian Financial Review said that BHP is preparing to meet Rio's largest shareholders this week.

It also said that Australia's competition regulator, the Australian Competition and Consumer Commission, would be likely to endorse any merger of BHP and Rio, given that most of the two companies' customers are outside Australia.

(Reporting by Jonathan Standing)

© Reuters2007All rights reserved