APP reported that BHP Billiton Limited feels that Rio Tinto Ltd shareholders stand to lose USD 53 billion if its board does not accept the mining giant's takeover offer.

Mr Don Argus chairman of BHPB while attending a briefing on the resources sector hosted by the Australian Shareholders Association in Melbourne this week said that the BHPB bid process for Rio Tinto has a long time to run and an offer document is not expected to be posted to shareholders until late 2008, following BHPB completing anti trust and other regulatory processes. He said that "Assuming a satisfactory regulatory outcome, Rio Tinto shareholders will be faced with two choices”
1. Accept BHPB's offer, which is priced at a 45% premium to the pre-approach trading valuation of the two companies.
2. Reject BHPB's offer.
He said that "Any transaction must be a good deal for both the BHP Billiton and the Rio Tinto shareholders.’

Mr Argus attempted to quantify what it would mean if Rio Tinto shareholders did not accept the BHP Billiton offer. He said "Our offer was made at a time when the market cap of Rio Tinto was USD 118 billion. The 3.4 for one share offer, implies a total market value of USD 171 billion. So that gives you an implied uplift of USD 53 billion, which you need to think about in the context of when people start to say Rio board, why aren't you engaging with these people?. Where is that USD 53 billion going to come from if you don't engage in this bid?"

BHP Billiton launched its offer of 3.4 shares for every Rio Tinto share in February 2008. Rio Tinto has said the bid undervalues the company and has rejected it, with the company's board declining to engage in discussions with BHP Billiton.