Mining giant’s offer rejected

7 February 2008

Rio Tinto has rejected BHP Billiton's offer to acquire all Rio Tinto shares, in a proposal where each Rio Tinto share would have been exchanged for 3.4 BHP Billiton shares.

The Rio Tinto board, which unanimously rejected the approximately $147.4 billion offer, said it significantly undervalued the firm and would not be in the interests of the shareholders.

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

BHP Billiton said the offer would have resulted in total incremental earnings before tax and other deductions of US$3.7 billion nominal a year within seven years of completion of the buyout.

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