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Rio Tinto rejects new BHP offer

Rio Tinto rejected a sweetened formal takeover bid from mining rival BHP Billiton, saying the all-share offer worth US$147.4 billion still does not reflect the value of the firm and its expansion prospects.

Rio Tinto, which had already rejected an initial approach from BHP Billiton last year, said its boards were unanimous in turning away an offer that would create the top global player in iron ore.

"BHP Billiton's offers, while improved, still fail to recognize the underlying value of Rio Tinto's quality assets and prospects," Rio Tinto chairman Paul Skinner said on Wednesday. "Our plans are unchanged, and will remain so unless a proposal is made that fully reflects the value of Rio Tinto."

BHP Billiton is already the world's largest diversified mining company, and Rio Tinto is the third-largest. Analysts say that if the deal succeeds it would be the biggest takeover in the mining sector and one of the biggest ever in the corporate world.

Steelmakers in China, Japan and Europe have protested BHP Billiton's bid, contending that a takeover would give it too much influence over global iron ore supplies and pricing.
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