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BHPBill -- panel deadline for Rio Tinto offer
BHPBill noted the statement made today by the UK Takeover Panel Executive ("Panel Executive") ruling that the deadline for BHPBill either to announce a firm intention to make an offer for Rio Tinto or to announce that it does not intend to make an offer for Rio Tinto is 5pm (London time) on Wednesday, 6 February 2008. BHPBill is considering its options in light of the deadline set by the Panel Executive but no decision has yet been taken on this matter. Accordingly, there can be no assurance that BHPBill will progress its proposal to Rio Tinto or that any offer for Rio Tinto will be made. BHPBill continues to seek to engage in discussions with Rio Tinto with a view to obtaining the support and recommendation of the board of Rio Tinto for its proposal.
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BHPBill -- prospectus for medium term note issue
Prospectus relating to the USD5 000 000 000 Euro Medium Term Note Programme of BHP Billiton Finance Ltd and BHP Billiton Finance BV, guaranteed by BHP Billiton Ltd and by BHPBill, which has been approved by the UK Listing Authority, is available for viewing.
The prospectus relating to the USD5 000 000 000 European Medium Term Note programme by BHP Billiton Finance Ltd and BHP Billiton Finance BV can be viewed at: http://www.rns-pdf.londonstockexchange.com/rns/2120k_1-2007-12-18.pdf.
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BHPBill -- approval of Kipper Gas Field
BHPBill announced that participants in the Kipper Gas Field Development have approved the first phase of development of the Gippsland Basin field located in offshore Victoria to produce new supplies of natural gas and liquids through new and existing Bass Strait facilities. The Kipper field has a confirmed resource of approximately 620 billion cubic feet of recoverable gas and 30 million barrels of condensate/LPG. Estimated field life is 15 years. First production is expected in calendar year 2011. Costs for this phase of the development of the Kipper gas field and related Gippsland Basin infrastructure are approximately USD1.1 billion, of which BHPBill's share is 45% (approximately USD500 million).
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BHPBill -- appointment to the board
BHPBill has appointed a new non-executive director, Dr David Morgan, to the BHPBill board, effective 1 January 2008.
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BHPBill -- suspension of share buy back programme
BHPBill notes that, since the announcement of 8 November 2007 concerning market speculation in relation to the proposal for a potential combination between BHPBill and Rio Tinto, BHP Billiton Ltd has continued to buy back ordinary shares in BHP Billiton Plc ("BHPBill") on the London Stock Exchange, as disclosed by BHPBill in daily announcements to the market. BHPBill confirms that these purchases have been made by an independent third party on behalf of BHPBill under an irrevocable mandate. The mandate ended today and BHP Billiton Ltd will suspend the programme of buying on-market ordinary shares in BHPBill as was announced on 7 February 2007 from the expiry of the mandate until further notice.
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BHPBill says its offer for Rio Tinto is fair
According to Business Report, BHPBill would continue to seek takeover talks with Rio Tinto, but it declined to increase its existing bid. BHPBill has refused to raise its three for one USD130 billion all stock offer for Rio Tinto, saying that the bid represented "compelling value" for shareholders, even though Rio Tinto has rejected the offer. BHPBill says that it has stronger growth prospects than Rio Tinto, but that a merger would achieve massive synergies, particularly in the Western Australian iron ore projects of both companies.
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BHPBill -- logic of three for one share proposal
BHPBill have reiterated the logic of its three for one share proposal to combine with Rio Tinto with the following highlights:
- Since 2001 BHPBill has created significantly greater shareholder value than Rio Tinto
- Compared to Rio Tinto, BHPBill has delivered superior production growth and invested more capital in development, delivering projects on time and on budget
- BHPBill has a superior growth profile to Rio Tinto due to its deeper, longer-term inventory of projects and development options focused on large-scale, high-margin brownfield expansions
- BHPBill's growth prospects are based on a broad range of substantial tier one assets.
These outstanding growth prospects underpin BHPBill's proposal to Rio Tinto of three BHPBill shares for one Rio Tinto share (reflecting a 41 per cent Rio Tinto shareholder interest in the combination) which it continues to believe offers Rio Tinto shareholders compelling value. BHPBill will continue to seek an opportunity to discuss its proposal with Rio Tinto given the significant incremental value that can only be unlocked through a combination of the two companies.
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BHPBill told by Rio Tinto to put up a firm offer
According to Business Report, Rio Tinto has challenged BHPBill to put forward a formal bid to create a mega-mining house or walk away from any possible deal. Rio Tinto said that it had asked the UK's Takeover Panel to set a deadline under a rule by which BHPBill would have to formalise its approach. Blackstone Group, which was also said to be interested in snapping up Rio Tinto, has denied any rumours of a counter bid for the company. As for BHPBill, UBS has commented that BHPBill could afford to top up its USD140 billion all-stock offer with USD27 billion in cash.
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BHPBill -- approval of Klipspruit project
BHPBill announced the approval of the Klipspruit Project, part of its energy coal operations in South Africa. The Klipspruit opencast mine (100% BHPBill owned) with a current run of mine (ROM) capacity of 4.8 million tonnes per annum (Mtpa) will be expanded to 8 Mtpa. The Klipspruit Project, which involves an investment of approximately USD450 million, will include the development of a 16 Mtpa coal processing plant called the Phola Coal Processing Plant in a 50:50 joint venture with Anglo Coal. The plant, processing 8 Mtpa of coal from each of the joint venture partners, will be located on the Klipspruit surface area and constructed by Anglo Coal. The existing Rietspruit coal washing plant, located 32 kilometres from Klipspruit will be replaced by the new Phola Coal Processing Plant.
Increased production is due to commence in the second half of calendar year 2009. Utilising current reserves, the mine is expected to have a 20 year life, although this has the potential to be extended through the development of further resources. Approximately 4 Mtpa of coal will be exported through the Richards Bay Coal Terminal, using BHPBill's existing allocation.
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BHPBill may exit Rio Tinto bid
Charlie Aitken of Southern Cross Equities was quoted in Business Report as saying that there was "every possibility that if BHP can't get a recommended deal from the Rio board that they will walk". Rio Tinto's shares in London are trading at a 14% premium to BHPBill's three-for-one share proposal, indicating that investors expect a higher offer to be put on the table. However, Aitken said that BHPBill would not offer more than 3.3 shares for Rio Tinto stock. Both BHPBill and Rio Tinto declined to comment.
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BHPBill may lose Rio Tinto to Chinese group
BHPBill faces competition in its bid to takeover the UK's Rio Tinto Group ("Rio Tinto"). According to Business Day, China's largest steel maker, Baosteel, may offer at least USD200 billion for Rio Tinto. This tops BHPBill's proposed USD125 billion offer for the group. As yet, BHPBill has not yet launched a formal bid for Rio Tinto, as this is not required under British law at this stage of the process. A formal competing bid definitely has the ability to increase the price that BHPBill or any other bidder would have to pay for the company.
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