China - BHP-Rio Tinto bid battle
AFX UK Focus) 2007-12-23 14:55 GMT:
LONDON (Thomson Financial) - China has begun concerted action to protect its position as one of the world's leading consumers of iron ore and other raw materials by launching a two-pronged initiative to gatecrash the 67 bln stg bid battle being fought between BHP Billiton PLC and rival mining group Rio Tinto PLC, The Sunday Telegraph reported citing City sources.
The Chinese have approached Lehman Brothers, the investment bank, and are scouring the globe for other advisers in their efforts to affect the outcome of BHP's unsolicited takeover bid for Rio, the newspaper added. No formal confirmation of Lehman's involvement has yet been made, it said.
The newspaper said Chinese embassies in the UK and Australia have sounded out banking and legal advisers in London and Sydney over the past 10 days. Officials are drawing up detailed analysis of the BHP-Rio situation to assess all of China's political options, it added.
At the same time three Chinese companies -- Chinalco, Baosteel and China Development Bank, which already owns a 1 pct stake in Rio Tinto -- have taken the lead in examining ways of using the markets to scupper BHP's approach for Rio. These include talks with a wider circle of Chinese state-owned metals businesses, according to City sources. tf.TFN-Europe_newsdesk@thomson.com ml/ak
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