The Australian and UK financial markets are abuzz with rumours that mining giant BHP Billiton Ltd is set to make an improved takeover bid for Rio Tinto this week sending Rio Tinto's share price up by 3% last week.

Analysts are speculating that a revised offer might be comprise 3.5 BHP Billiton shares for one Rio share, plus a cash component.

Ms Samantha Evans spokeswoman of BHPB said that she could not comment on the speculation. She said "We are not commenting on any of those rumours at all. There seems to be one a day at the moment."

Mr Tom Albanese CEO of Rio was asked on Sky News on Sunday if he expected a revised bid from BHP Billiton soon. He said "I would not comment on speculation. There has been an awful lot of speculation. If the value is not there, it is not there. If it is there, it is there, but I would not want to speculate."

On December 21st 2007, the UK Takeovers Panel set a deadline of February 6th 2008 for BHP Billiton to announce its intention to make a firm and formal offer, or cease stalking Rio Tinto.