August 22, 2008

BHPB bid for Rio –BHPB confident of its logic

BHP Billiton said that most investors and many customers see the logic in its offer for Rio Tinto Group and that it is unlikely to be matched by any rival.

Mr Marius Kloppers CEO of BHPB in a speech to shareholders in Adelaide said that “The bottom line here is simple. These two companies are worth more together than apart. It is not a question of us needing them or them needing us. The proposed combination would cut costs and deliver more raw materials faster to customers to feed surging demand from China and India.”

Mr Kloppers added that “We have got a proposition on the table which is compelling. We do not think that anybody else has got the ability to replicate that. “We remain hopeful and confident that Rio Tinto will engage with us on this important proposal.''

He said that BHPB has met with about half of both companies' shareholders and most see the logic to the deal. He said Different people have different views. We have engaged in open dialogue with our customers. Many already see the logic of our proposal and the benefits of more product to the market more quickly. We have got a track record over many years and many products that say what we seek is transparency in prices, for the market to set the price and we are happy to take the price. For the customer the security of supply is the best we can do.”

On the other hand Rio said that the offer undervalues it and is increasing dividends and selling assets to repel the bid.