FT reported that BHP Billiton has suspended its USD 10 billion on market buy back of its UK listed shares until further notice, reflecting the fact that it is expected to make a bid for rival Rio Tinto.

The cancellation of the buy back program, which was extended from USD 3 billion to USD 10 billion in February 2008, comes as the UK Takeover Panel is about to set a deadline for BHP to either launch a bid for Rio Tinto or to walk away for at least six months.

The report said that “UK Takeover Panel rules state that a company can not renew a buy back mandate during an offer period because it is in the possession of market sensitive information.”

Rio Tinto said on Monday that it was pleased that the buy back had been terminated as it had been a matter of concern for them ever since BHP’s proposal was made public. It said the buy back scheme may have artificially buoyed the value of BHP’s proposed takeover offer. BHPB rejects that criticism, saying that the irrevocable mandate had to run until it expired.