Shares in Anglo-Australian mining giant Rio Tinto soared more than 11 percent to record levels yesterday amid rumors of a possible takeover offer from larger rival BHP Billiton, dealers said.
Rio Tinto, a dual listed firm, has a market value of some A$44.8 billion (US$36.9 billion). Rio Tinto and BHP Billiton are the two largest mining companies in the world.
After the close, Rio Tinto said it was unaware of any takeover approach from BHP Billiton after receiving a formal query from the Australian Stock Exchange about its share price spike.
Rio Tinto's shares jumped A$9.99 or 11.1 percent to an all-time high of A$99.69 as the rumors swept the market but came off the highs to close up A$5.80 or 6.47 percent at A$95.50 after the company's statement.
BHP Billiton added A$0.75 or 4.2 percent at A$31.93.
UBS resources analyst Glyn Lawcock said the unsubstantiated rumor was that BHP was lining up a A$110 a share offer for Rio Tinto.
Lawcock said that Rio Tinto would be an attractive target for BHP, given its low-cost mining assets and the potential for cost savings.
"If BHP was going to make a move Rio would be an attractive acquisition," he said.
A spokeswoman for BHP Billiton declined to comment on the speculation.
RSS