BHP Billiton, the world’s biggest mining group, is considering the sale of one of its largest units, BHP Petroleum, to help finance a hostile takeover.
To help finance Rio Tinto takeover
LONDON: BHP Billiton, the world’s biggest mining group, is considering the sale of one of its largest units, BHP Petroleum, to help finance a hostile takeover of Rio Tinto, the UK newspaper said.
BHP’s financial advisers Goldman Sachs and Citigroup, have flown to China to sound out potential bidders for the subsidiary which could be worth more than £20 billion ($42.2 billion).
There would also be interest in the oil and gas fields from other international buyers, the Sunday Times said.
BHP on Thursday approached third-ranking world mining group Rio with an all-share takeover offer worth $140 billion aimed at creating a $350-billion-plus mining giant, but Rio was quick to rebuff the 3-for-1 share offer as too low.
The paper added that BHP is considering whether to table a hostile all-paper bid for Rio, but sources close to Rio say the board is unlikely to entertain an offer below £70 a share, compared with the £48 value of the current BHP proposal.
Another UK newspaper, the Financial Mail on Sunday, said that BHP is considering injecting a significant cash element into its offer for Rio and is believed to be negotiating a loan of up to £33 billion to allow it to sweeten its bid with cash.
Meanwhile, the Sunday Telegraph newspaper said the state-owned China Development Bank has taken a stake of less than 1% in Rio in a sign that China may intervene in the
bid battle as China consumes nearly 50% of world iron ore production, while the two miners together would control almost 40% of production.
Spokesmen for both BHP and Rio declined to comment.
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