Kloppers plans largest hostile takeover ever

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The Independent Online

BHP Billiton's chief executive Marius Kloppers said yesterday he would "not rule out" launching the world's largest ever hostile takeover after Rio Tinto issued a fresh rebuke to its suitor's proposed 67bn offer.

The hardening rhetoric from Mr Kloppers signalled a further deterioration of relations with Rio, which this week requested that the Takeover Panel impose a "put-up or shut-up" deadline on its suitor. BHP res-ponded yesterday by giving a presentation to analysts and investors in which it painted itself as a clearly "superior" company to Rio that would be better placed to squeeze value out of the combined entity. The company also reiterated that its proposed 3-for-1 share swap was "a clearly and simply compelling proposal."

Most analysts continue to believe, however, that BHP will have to dig much deeper to win Rio, whose shares remain about 10 per cent above BHP's offer price.

When asked if he would be willing to go hostile, Mr Kloppers said he was "ruling nothing in or nothing out if we are eventually dealing with a 'put-up or shut-up' deadline." He also implied that Rio chief executive Tom Albanese was acting irresponsibly by refusing to start talks. "The responsible thing to do would be to engage," he said. "We don't see the downside of engaging."

A Rio spokeswoman said yesterday that BHP's bid was "still dead in the water" and that "today's presentation adds nothing new". The hardening rhetoric between the world's No 1 and No 3 miners came on the same day that rival Xstrata admitted that it had held takeover talks with "a number of parties", raising the spectre of a rash of mega-mergers in the mining industry. Xstrata has been linked with Brazilian giant Vale as well as Anglo American, though a spokeswoman declined to say who the company is talking to.

Anglo American did not comment, but is understood to be sizing up the assets that a combined BHP-Rio would be forced by antitrust regulators to sell if a deal does go through.

Mr Kloppers argued yesterday that BHP has a far better track record at generating shareholder value than does Rio, pointing to the fact that in 1999 its market was just $7bn (3.4bn) higher, a gap which had grown to about $100bn immediately before the offer was launched last month.