With the increase in skirmishes between BHP Billiton and Rio Tinto this week, fund managers are hoping for sweetened bid from BHP and believe this may be the final push needed to get Rio's board to engage in talks.

Rio Tinto applied to the UK Takeover Panel to impose a deadline on BHP's unremitting calls for merger talks this week banging, which will give BHP six to eight weeks to raise its proposal enough to get Rio engaged or go hostile or walk way and not bid for at least six months. BHP hurriedly convened a media and investor presentation in London at which Mr Marius Kloppers CEO of BHPB responded by reiterating his already rejected 3 for 1 offer.

Mr Tim Barker resources funds manager with BT Financial Group said "The bottom line is that the two companies should be talking to each other, so perhaps locking the door is not the best thing for Rio to do, but then being obstinate perhaps is not the best decision on BHP's part.”

According to Perennial Growth Management partner Mr Ken West the key for a significantly increased BHP bid will depend on shareholders' view of the long term benefits of a merger. He said “ higher bid would be depressive in terms of returns on investment, but if we can see it being strongly accretive in the medium to long term, that would be something we'd take account of.”

The encouragement for BHP is that with 60% to 70% of Rio's shareholders also having shares in BHP, shareholders are keen for a merger to be at least actively explored.