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Rio Tinto Ltd worth more than BHP bid, CEO says

A worker helps conduct a ``pour'' at Anglo-Australian mining giant Rio Tinto's plant at Kwinana in Perth on April 2 last year. Rio Tinto, the target of a takeover proposal from mining rival BHP Billiton, said last Monday it was poised for exceptional growth and denied receiving a counter approach from Chinese investors. PHOTO: AFP

The market value of mining giant Rio Tinto Ltd continues to outstrip the multibillion dollar bid put forward by rival BHP Billiton Ltd, Rio's chief executive Tom Albanese said yesterday.

"We've seen the market move well past the BHP proposal, which we rejected, and the market to some extent is speaking, it's basically saying that, `Yes, we agree it's worth a lot more,'" Albanese told Australian Broadcasting Corp television.

Rio Tinto has rejected the merger proposal of three BHP Billiton shares for every Rio share, which is valued at about US$134 billion, based on current share levels.

Albanese -- who returned to company headquarters in London on Saturday after a two-day investor roadshow in Sydney and Melbourne -- refused to be drawn on what Rio Tinto was worth, saying the company's value was "several ballparks away" from BHP Billiton's proposal.

Rio Tinto has launched a vigorous defense of BHP's unsolicited approach, outlining a blueprint of growth taking in aggressive iron ore expansions, new copper and nickel developments, increased dividends and assets sales.

Albanese brushed off suggestions there was a general consensus that putting the two companies together was a good idea.

"I'm not sure that I would call it a consensus and the reason I wouldn't call it a consensus is that the value of the pipeline that we've talked about, tripling the iron ore business is vastly more valuable than the synergies they have imported," Albanese said.

"There are synergies, most of the synergies come from the Rio Tinto side of the ledger and the proposal we received didn't recognize that so it was a pretty easy decision to just say no," he said.
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