Timberline Resources Corp (fka TLRS)

[TechKim]

$173.6 billion takeover bid for BHP Billiton. In comparison TBLC will be the biggest mineral mining service company in North America. I would expect merger and take over mania within the mining service sector as higher mineral mining services are being demanded by higher prices of those minerals.


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Australian miner’s $173.6 billion takeover bid
BHP Billiton Ltd. makes stock offer to purchase rival Rio Tinto Ltd

SYDNEY, Australia - BHP Billiton Ltd/Plc, the world’s No.1 miner, launched a hostile $147.4 billion bid for Rio Tinto Ltd/Plc, a deal that would be the world’s second largest takeover if successful.

A marriage of the two mining giants would create the world’s third richest company, with a market capitalization eclipsed only by Exxon Mobil and General Electric.

BHP sweetened its initial three-for-one approach, offering 3.4 of its shares for every Rio share after failing to persuade the Rio board to agree to a friendly merger.

“The Rio Tinto shareholders will now decide,” Kloppers said.

BHP, which said its first-half profit fell 2.4 percent to $6.017 billion, needs at least 50 percent of holders of both Rio’s Australian and London shares to accept for the deal to go through.

“This is our first and only offer,” Kloppers told a media briefing, though he later would not say if that meant it was the final one.

He said BHP had not spoken with the Rio board before making the offer, but believed the offer had widespread support among Rio shareholders, 60 to 70 percent of whom also hold BHP shares.

The offer equates to a 45 percent premium to Rio’s stock price in November before BHP first raised the idea of a union in a three-for-one share swap.

“It’s a lot fairer than the offer we’ve had before. It’s by no means a knock-out offer,” said Bertie Thomson, a fund manager at Aberdeen Asset Management, who holds both Rio and BHP shares.

Shares in BHP fell 4.8 percent at A$37.75 on Wednesday, while Rio rose 1.3 percent to A$128.96.

Rio Tinto has long opposed BHP’s overtures, arguing it was better off as an independent company, digging its own iron ore mines and churning out hundreds of thousands of tons of copper, zinc and aluminum.

Rio in a statement said it was considering the offer and advised its shareholders not to take any action.

Key customers for both companies, particularly steel mills in China and Japan, which buy hundreds of millions of tons of iron ore each year, have raised concerns about the potential dominance of a merged group.

“The offer should be enough to get BHP talking to Rio,” said Rob Patterson, managing director of fund manager Argo Investments. “We think to raise the offer to that degree probably makes sense.”

BHP’s task was made more complicated last week when aluminum Corp of China teamed with Alcoa Inc to buy 9 percent of Rio in a share raid in London.

BHP said Rio shareholders would hold 44 percent of the merged entity, compared with 36 percent in the initial approach made last November.

The company earlier said it faced significantly higher input costs and unfavorable foreign exchange movements during the first half, although underlying earnings before interest and tax rose 5.4 percent to $9.6 billion.

The group posted record half-year results in its iron ore, petroleum and manganese businesses.

BHP also lifted its interim dividend to 29 cents a share, up 45 percent year-on-year.

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