Rio Tinto responds to deadline imposed on BHP Billiton

Rio Tinto welcomes announcement by The Takeover Panel Executive that it has imposed a deadline of 6 February 2008, by which BHP Billiton must, unless the Takeover Panel Executive consents otherwise, either announce a firm intention to make an offer for Rio Tinto plc under Rule 2.5 of the UK Takeover Code or announce that it does not intend to make an offer for Rio Tinto plc. If BHP Billiton announces that it does not intend to make an offer for Rio Tinto plc, BHP Billiton and any person acting in concert with it will, except with the consent of the Takeover Panel Executive, be bound by the restrictions contained in Rule 2.8 of the UK Takeover Code for six months from the date of such announcement.

By 6 February, BHP Billiton will have had 3 months to make a decision and Rio Tinto believes it is in the interests of the Group and its shareholders that this period of uncertainty is brought to an end.

The proposal from BHP Billiton suggested that each Rio Tinto share would be exchanged for three shares in BHP Billiton. The Boards of Rio Tinto gave the proposal careful consideration and concluded that it significantly undervalues Rio Tinto and its prospects. Accordingly, the Boards unanimously rejected the proposal as not being in the best interests of shareholders.

While the deadline set by the Takeover Panel Executive applies only in respect of Rio Tinto plc, shareholders of both Rio Tinto plc and Rio Tinto Limited should note that the dual listed companies’ constitution is designed to ensure that a person cannot take control of one company without having made an offer to the public shareholders of both companies.

Paul Skinner, Chairman of Rio Tinto said in a statement, “The Boards are unanimous in the view that BHP Billiton’s rejected proposal was wholly inadequate and that Rio Tinto’s very strong existing portfolio will create significant future value for shareholders. We have been very clear as to where we stand and feel it is time for BHP to do likewise. Our shareholders deserve to have certainty and therefore we welcome the Panel’s decision today.

“The Boards and management remain focused on the task of delivering on Rio Tinto’s potential and on maximising value for all shareholders.”

As required by the Takeover Code, Rio Tinto confirms that this announcement is not being made with the agreement or approval of BHP Billiton. A further announcement will be made in due course.

Story link: Rio Tinto responds to deadline imposed on BHP Billiton