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BIL
BIBLT
BIL - Bhp Billiton Offer For Rio Tinto
News Release
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
Number 07/08
6 February 2008
Not for release, publication or distribution in or into Japan
BHP BILLITON OFFER FOR RIO TINTO
BHP Billiton Announces Offer of 3.4 BHP Billiton Shares per Rio Tinto
Share to Create the World`s Premier Diversified Resources Company
The Board of BHP Billiton today announced an offer for all of the shares
in Rio Tinto Limited and Rio Tinto plc. The combination of BHP Billiton
and Rio Tinto will create the world`s premier diversified natural
resources company with a unique opportunity to unlock value for
shareholders:
- Unparalleled exposure to the same key mineral basins will create
significant value by optimising production efficiencies and delivering
greater volumes on an accelerated basis to meet growing demand;
- Creation of substantial value through quantified synergies and
benefits which are expected to contribute a total incremental EBITDA of
US$3.7 billion nominal per annum within seven years of completion of the
Acquisition;
- Efficient development of the next generation of large-scale projects
in new regions for the benefit of its customers, the communities in which
it operates, and its shareholders; and
- A world-class management and operational team with strength and
depth across all levels of the organisation with a commitment to the
pursuit of excellence and the highest standards in safety and
sustainability and a focus on global best practice in community and the
environment.
This value will only be unlocked if the Offers are successful.
BHP Billiton`s offer will deliver to Rio Tinto shareholders:
- 3.4 BHP Billiton shares for each Rio Tinto share;
- Approximately 44 per cent of the Enlarged Group compared with
approximately 36 per cent based on the market capitalisations of the
companies prior to the approach by BHP Billiton to Rio Tinto on 1
November 2007; and
- A 45 per cent premium to the Rio Tinto share price prior to the
approach.
The Offers contain a minimum acceptance condition requiring acceptances
relating to more than 50 per cent of the publicly-held shares in each of
Rio Tinto Limited and Rio Tinto plc. BHP Billiton also proposes a buy-
back of up to US$30 billion within one year of completing the Acquisition
if its 3.4 for one offer is successful.
BHP Billiton firmly believes that the combination creates value for
existing BHP Billiton shareholders who will own approximately 56 per cent
of the Enlarged Group. Further, cash flow and earnings per share will be
accretive from the first full fiscal year following completion (after
adjusting for the proposed share buyback and excluding depreciation on
the write-up of Rio Tinto`s assets).
This release is intended to be a summary only and should be read in
conjunction with the full text of the attached Announcement, including
Appendices, where more detailed information about the Offers (including
definitions) can be found.
Contacts:
Australia
Don Carroll, Investor Relations
Tel: +61 3 9609 2686 Mobile: +61 417 591 938
email: Don.A.Carroll@bhpbilliton.com
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
United Kingdom
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131 Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com
South Africa
Alison Gilbert, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Alison.Gilbert@bhpbilliton.com
Not for release, publication or distribution in or into Japan
BHP BILLITON OFFER FOR RIO TINTO
BHP Billiton Limited Offers for Rio Tinto Plc and for Rio Tinto Limited
The Board of BHP Billiton announces an offer for Rio Tinto of 3.4 BHP
Billiton shares for each Rio Tinto share, which, if successful, would
create the world`s premier diversified resources company. BHP Billiton
believes this is compelling to shareholders of both Rio Tinto and BHP
Billiton, unlocking significant value not available to either company on
a stand-alone basis whilst allowing Rio Tinto shareholders to participate
in the Enlarged Group.
Both BHP Billiton and Rio Tinto are dual listed companies (DLCs) with
separate listed parent entities in the United Kingdom (BHP Billiton Plc
and Rio Tinto plc) and Australia (BHP Billiton Limited and Rio Tinto
Limited). BHP Billiton Limited is making inter-conditional Offers for
all of the Rio Tinto plc and Rio Tinto Limited shares.
On 8 November 2007 BHP Billiton announced it had approached Rio Tinto (on
1 November 2007) to propose combining the groups through two inter-
conditional schemes of arrangement. Extensive consultations with the
shareholders and stakeholders of both Rio Tinto and BHP Billiton have
indicated a clear understanding of the industrial logic of such a
combination and assisted BHP Billiton in determining the terms of the
Offers being made today to the shareholders of Rio Tinto. These terms
represent compelling value for Rio Tinto shareholders and a substantial
increase over the initial proposal made to the Board of Rio Tinto. The
Offers would give Rio Tinto shareholders:
- A 45 per cent premium(1), which the Board of BHP Billiton believes is
attractive for an equity offer in this sector;
- Ongoing participation in the world`s premier diversified resources
company;
- Approximately 44 per cent of the Enlarged Group, compared to
approximately 36 per cent based on the market capitalisations prior to
the approach by BHP Billiton to Rio Tinto(2); and
- A share of ongoing synergies not available to either company alone.
Since 1 November 2007 BHP Billiton has continued to seek the support and
recommendation of the Board of Rio Tinto. However, to date, Rio Tinto
has refused to enter into discussions with BHP Billiton and, as a result,
BHP Billiton now believes it is appropriate to make an offer directly to
Rio Tinto shareholders and is today announcing the terms of its Offers
which represent a significant improvement to the terms of the proposal
made to the Board of Rio Tinto in November.
Commenting on the Acquisition, Don Argus, the Chairman of BHP Billiton,
said:
"This combination of two industry-leading companies provides a unique
opportunity to create a truly unparalleled resources company. Whilst both
BHP Billiton and Rio Tinto have proven strategies and excellent future
growth prospects on a stand-alone basis, a combined entity would be able
to unlock significant additional value for both sets of shareholders and
be in an unparalleled position to capitalise on future opportunities.
BHP Billiton and Rio Tinto already share many important characteristics
such as an overriding commitment to safety, community and sustainability.
"We are firmly of the view that the terms of the offer announced today
are compelling and reflect our absolute conviction in the strength of
this combination which has convinced us to make this offer directly to
Rio Tinto`s shareholders."
Commenting on the Acquisition, Marius Kloppers, Chief Executive Officer
of BHP Billiton, said:
"The logic of this transaction is well understood; a combination would
provide opportunities to exploit quantified synergies and benefits worth
US$3.7 billion per annum, which would otherwise be unavailable to both
sets of shareholders. A combined company would also create the world`s
premier diversified resources company with both sets of shareholders
being offered an opportunity to be part of a truly great global growth
story."
BHP Billiton`s offer to acquire Rio Tinto
BHP Billiton`s offer to acquire Rio Tinto provides the following:
- Consideration of 3.4 BHP Billiton shares for each Rio Tinto share;
- Total consideration to Rio Tinto shareholders of:
* US$173.6 billion, based on the closing share prices of BHP Billiton
Limited and BHP Billiton Plc on 31 October 2007 (the last date prior to
BHP Billiton`s approach to Rio Tinto); and
* US$147.4 billion, based on the closing share prices of BHP Billiton
Limited and BHP Billiton Plc on 4 February 2008 (the last practicable
date prior to this Announcement).
BHP Billiton has set the minimum acceptance condition such that it only
needs to receive acceptances in respect of more than 50 per cent of the
publicly-held shares in each of Rio Tinto plc and Rio Tinto Limited.
Rio Tinto plc Offer
BHP Billiton`s offer for Rio Tinto plc will be structured as an offer by
BHP Billiton Limited:
- Consideration of 3.4 BHP Billiton shares for each Rio Tinto plc Share;
- Consideration of 80 per cent BHP Billiton Plc Shares and 20 per cent
BHP Billiton Limited Shares, with a Mix and Match Facility; and
- Free Share Sale Facility in relation to New BHP Billiton Limited Shares
for Rio Tinto plc Shareholders who hold fewer than 25,000 Rio Tinto plc
Shares.
This values each Rio Tinto plc Share at approximately ?63.79, giving a
total consideration to Rio Tinto plc Shareholders of approximately ?63.6
billion based on closing prices on 31 October 2007.
BHP Billiton reserves the right to implement the Rio Tinto plc Offer by
way of a scheme of arrangement for Rio Tinto plc and to otherwise amend
the terms of the Rio Tinto plc Offer, subject to the UK Code.
Rio Tinto Limited Offer
BHP Billiton`s offer for Rio Tinto Limited will be structured as an offer
by BHP Billiton Limited:
- Consideration of 3.4 New BHP Billiton Limited Shares for each Rio Tinto
Limited Share.
This values each Rio Tinto Limited Share at approximately A$156.74,
giving a total consideration to Rio Tinto Limited Shareholders of
approximately A$44.8 billion based on closing prices on 31 October 2007.
BHP Billiton reserves the right to implement the Rio Tinto Limited Offer
by way of a scheme of arrangement for Rio Tinto Limited or to otherwise
amend the terms of the Rio Tinto Limited Offer in a way which is not
substantially less favourable to Rio Tinto Limited shareholders, subject
to the Australian Corporations Act.
Proposed share buyback
If BHP Billiton`s offer is successful(3), BHP Billiton proposes to pursue
a capital management programme to maintain a single A rating and return
up to US$30 billion to shareholders through a share buyback within 12
months of completing the Acquisition.
A compelling combination
BHP Billiton believes that together Rio Tinto and BHP Billiton would be
an unparalleled strategic fit in terms of asset mix and quality, and
culture:
- The Enlarged Group would be without comparison in the diversified
natural resources industry in terms of capacity to develop the projects
required to meet the growing demand for resources;
- The combination reinforces BHP Billiton`s and Rio Tinto`s strategies of
owning upstream, long-life, low-cost, expandable assets diversified by
commodity and geography;
- The combination would create a unique organisation with a world-class
management and operational team that will realise further benefits from
corporate renewal and maintain strong focus on global best practice in
safety, community and sustainability; and
- The Offers preserve the advantages of the DLC structure by permitting
shareholders to participate in the Enlarged Group in both markets.
Unlocking value
BHP Billiton`s and Rio Tinto`s unparalleled exposure to overlapping
mineral basin positions is expected to unlock significant opportunities
for value creation by:
- Optimising production efficiencies at current assets;
- Delivering embedded growth options within current portfolios; and
- Accelerating future opportunities within the combined pipeline.
These opportunities would not be available to either BHP Billiton or Rio
Tinto on their own.
Significant quantified synergies
The combination of BHP Billiton and Rio Tinto is expected to create
substantial value through quantified synergies and benefits which are
expected to contribute a total incremental EBITDA of US$3.7 billion
nominal per annum within seven years of completion of the Acquisition. In
particular, BHP Billiton expects:
- US$1.7 billion nominal per annum of cost savings in the third full year
following completion, achieved through removal of duplication as well as
procurement and operating efficiency savings; and
- Further EBITDA enhancement of US$2.0 billion nominal per annum in the
seventh full year following completion, driven primarily by the
acceleration of volumes to customers.
An all-share offer allowing continued participation by Rio Tinto
shareholders
The Acquisition is structured as an all-share transaction, allowing Rio
Tinto shareholders to participate in the Enlarged Group and gain exposure
to the world`s premier diversified natural resources company with its
strengthened asset portfolio and greater diversification.
Rio Tinto shareholders would benefit from the premium implied by the
Offers and ownership of approximately 44 per cent of the Enlarged Group.
It is expected that UK capital gains tax rollover relief will be
available to UK resident shareholders accepting the Rio Tinto plc Offer
in respect of their New BHP Billiton Plc Shares and New BHP Billiton
Limited Shares subject to approximately 70 per cent acceptances under the
Rio Tinto plc Offer.
If BHP Billiton Limited is able to proceed with the compulsory
acquisition of any remaining Rio Tinto Limited Shares, BHP Billiton
Limited expects capital gains tax rollover relief to be available to
Australian resident shareholders accepting the Rio Tinto Limited Offer.
Given the size of the Rio Tinto Limited Cross-holding, to reach the
compulsory acquisition thresholds in relation to Rio Tinto Limited:
(A) some or all of this holding will need to be accepted into the Rio
Tinto Limited Offer by Rio Tinto plc; or
(B) ASIC will need to provide relief from the Australian Corporations
Act.
ASIC has indicated that it would consider an application for this relief
on its merits if it becomes apparent that the Rio Tinto Limited Cross-
holding has a clear defensive effect.
Deliverable Offers
The Offers are subject to Pre-conditions relating to merger control and
regulatory approvals in a number of jurisdictions. Applications to the
relevant regulatory authorities have not yet been made although
substantive pre-notification discussions with the European Commission are
underway. Contacts have also been made with a number of other regulators
and formal notifications will follow in due course. BHP Billiton
believes that satisfactory clearances should be achievable.
Enhanced earnings, cash flow and strong capital structure
The Enlarged Group will deliver enhanced earnings and cash flow, allowing
more efficient balance sheet management for the benefit of shareholders:
- The Acquisition is expected to be accretive to BHP Billiton`s earnings
per share (after adjusting for the proposed share buyback and excluding
depreciation on the write-up of Rio Tinto`s assets) and cash flow per
share (after adjusting for the proposed share buyback) from the first
full fiscal year following completion of the Acquisition;
- It is BHP Billiton`s intention to maintain a single A rating for the
Enlarged Group, with financial flexibility to return significant capital
in the future;
- In line with this target, and if the Offers are successful(4), BHP
Billiton proposes to return up to US$30 billion to shareholders through a
share buyback within 12 months of completion of the Acquisition;
- The proposed share buyback and any refinancing of Rio Tinto`s remaining
borrowings will be funded through a combination of a committed bank
financing facility of US$55 billion, together with cash flow from
operations, asset disposals and, if required, debt financing; and
- BHP Billiton intends to maintain its current progressive dividend
policy following completion of the Acquisition.
This summary should be read in conjunction with the full text of the
attached Announcement, including the Appendices.
Goldman Sachs International and Gresham Partners are acting as principal
financial advisers to BHP Billiton in relation to the Offers.
BNP Paribas SA ("BNP Paribas"), Citigroup Global Markets Limited
("Citi"), HSBC Bank plc ("HSBC"), Lazard & Co., Limited ("Lazard"),
Merrill Lynch International and UBS (UBS Investment Bank, being UBS AG,
Australia Branch and/or UBS Limited) are also providing financial advice
to BHP Billiton.
Barclays Capital (the investment banking division of Barclays Bank PLC);
BNP Paribas; Citigroup Global Markets Limited; Goldman Sachs
International; HSBC Bank plc; Banco Santander, S.A.; and UBS Limited are
acting as Mandated Lead Arrangers of the US$55 billion committed bank
financing facility.
Contacts:
Australia
Don Carroll, Investor Relations
Tel: +61 3 9609 2686 Mobile: +61 417 591 938
email: Don.A.Carroll@bhpbilliton.com
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
United Kingdom
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131 Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com
South Africa
Alison Gilbert, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Alison.Gilbert@bhpbilliton.com
This Announcement is for information purposes only and does not
constitute an offer or invitation to acquire or dispose of any securities
or investment advice in any jurisdiction. Any offer, invitation or
inducement to acquire or dispose of any securities of BHP Billiton Plc,
BHP Billiton Limited, Rio Tinto plc and/or Rio Tinto Limited will be made
solely by means of the BHP Billiton Prospectus, the BHP Billiton Bidder`s
Statement, the Rio Tinto plc Offer Document and associated documents
expected to be published on satisfaction of the Pre-conditions, and any
decision to keep, buy or sell shares in Rio Tinto plc or Rio Tinto
Limited should be made solely on the basis of the information contained
in such documents. In addition, BHP Billiton shareholders are urged to
read the BHP Billiton Prospectus and associated class 1 shareholder
circular/explanatory statement before making any decision regarding the
proposed transaction. The BHP Billiton Prospectus, BHP Billiton Bidder`s
Statement, Rio Tinto plc Offer Document and related documents, once
published, may be obtained from BHP Billiton`s website at
www.bhpbilliton.com or on request from BHP Billiton.
Information Relating to the US Offer for Rio Tinto plc
BHP Billiton plans to register the offer and sale of securities it would
issue to Rio Tinto plc US shareholders and Rio Tinto plc ADR holders by
filing with the SEC a Registration Statement (the "Registration
Statement"), which will contain a prospectus ("Prospectus"), as well as
other relevant materials. No such materials have yet been filed. This
communication is not a substitute for any Registration Statement or
Prospectus that BHP Billiton may file with the SEC.
U.S. INVESTORS AND U.S. HOLDERS OF RIO TINTO PLC SECURITIES AND ALL
HOLDERS OF RIO TINTO PLC ADRs ARE URGED TO READ ANY REGISTRATION
STATEMENT, PROSPECTUS AND ANY OTHER DOCUMENTS MADE AVAILABLE TO THEM
AND/OR FILED WITH THE SEC REGARDING THE POTENTIAL TRANSACTION, AS WELL AS
ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to obtain a free copy of the
Registration Statement and the Prospectus as well as other relevant
documents filed with the SEC at the SEC`s website (http://www.sec.gov),
once such documents are filed with the SEC. Copies of such documents may
also be obtained from BHP Billiton without charge, once they are filed
with the SEC.
Information for US Holders of Rio Tinto Limited Shares
BHP Billiton Limited is not required to, and does not plan to, prepare
and file with the SEC a registration statement in respect of the Rio
Tinto Limited Offer. Accordingly, Rio Tinto Limited Shareholders should
carefully consider the following:
The Rio Tinto Limited Offer will be an exchange offer made for the
securities of a foreign company. Such offer is subject to disclosure
requirements of a foreign country that are different from those of the
United States. Financial statements included in the document will be
prepared in accordance with foreign accounting standards that may not be
comparable to the financial statements of United States companies.
Information Relating to the US Offer for Rio Tinto plc and the Rio Tinto
Limited Offer for Rio Tinto shareholders located in the US
It may be difficult for you to enforce your rights and any claim you may
have arising under the US federal securities laws, since the issuers are
located in a foreign country, and some or all of their officers and
directors may be residents of foreign countries. You may not be able to
sue a foreign company or its officers or directors in a foreign court for
violations of the US securities laws. It may be difficult to compel a
foreign company and its affiliates to subject themselves to a US court`s
judgement.
You should be aware that BHP Billiton may purchase securities of Rio
Tinto plc and Rio Tinto Limited otherwise than under the exchange offer,
such as in open market or privately negotiated purchases.
The Offers are not being made in or into, and are not capable of
acceptance in Japan or any other jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by the use of
the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and/or the internet) of
interstate or foreign commerce, or any facility of a national securities
exchange, of such jurisdiction.
The Rio Tinto Limited Offer will not necessarily be registered in any
jurisdiction outside Australia (unless an applicable foreign law treats
it as registered as a result of the BHP Billiton Bidder`s statement being
lodged with ASIC). Any Rio Tinto Limited Shareholder who wishes to
accept the Rio Tinto Limited Offer must first satisfy itself that such
acceptance is permitted by any foreign law applicable to that
shareholder. If any authority or clearance under Australian law is
required to enable a shareholder in Rio Tinto Limited to receive any
consideration under the Rio Tinto Limited Offer, any acceptance of the
Rio Tinto Limited Offer will not create any right to receive that
consideration unless and until all requisite authorities or clearances
have been received.
Goldman Sachs International, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively
for BHP Billiton as principal financial adviser and corporate broker in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the customers of Goldman Sachs International or for providing advice in
relation to matters described in this Announcement.
Gresham Partners, which holds an Australian Financial Services Licence
under the Australian Corporations Act, is acting exclusively for BHP
Billiton as principal financial adviser in relation to the matters
described in this Announcement and will not be responsible to anyone
other than BHP Billiton for providing the protections afforded to the
clients of Gresham Partners nor for providing advice in relation to
matters described in this Announcement.
BNP Paribas, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of BNP Paribas or for providing advice in relation to
matters described in this Announcement.
Citi, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice and acting as
corporate broker to BHP Billiton in relation to the matters described in
this Announcement and is not advising any other person and accordingly
will not be responsible to any person other than BHP Billiton for
providing the protections afforded to the customers of Citi or for
providing advice in relation to matters described in this Announcement.
HSBC, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of HSBC or for providing advice in relation to matters
described in this Announcement.
Lazard, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of Lazard or for providing advice in relation to matters
described in this Announcement.
Merrill Lynch International, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is providing
financial advice and acting as corporate broker to BHP Billiton in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the customers of Merrill Lynch International or for providing advice in
relation to matters described in this Announcement.
UBS Investment Bank is providing financial advice to BHP Billiton in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the clients of UBS or for providing advice in relation to matters
described in this Announcement.
The banks participating in the committed bank financing facility of US$55
billion are as follows:
As Mandated Lead Arranger: Barclays Capital (the investment banking
division of Barclays Bank PLC); BNP Paribas; Citigroup Global Markets
Limited; Goldman Sachs International; HSBC Bank plc; Banco Santander,
S.A.; and UBS Limited.
As Underwriter: Barclays Bank PLC; BNP Paribas; Citibank N.A., London
Branch; Goldman Sachs Credit Partners L.P.; HSBC Bank plc; Banco
Santander, S.A.; and UBS AG, London Branch.
It is possible that this Announcement could or may contain forward-
looking statements that are based on current expectations or beliefs, as
well as assumptions about future events. Reliance should not be placed
on any such statements because of their very nature, they are subject to
known and unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and BHP Billiton`s plans and
objectives, to differ materially from those expressed or implied in the
forward-looking statements.
None of the statements concerning expected cost savings and volume-driven
benefits (and resulting incremental EBITDA) and earnings per share
accretion in this Announcement should be interpreted to mean that the
future earnings per share of the Enlarged Group for current or future
financial years will necessarily match or exceed the historical or
published earnings per share of BHP Billiton, and the actual cost savings
and volume-driven benefits (and resulting EBITDA enhancement) may be
materially greater or less than estimated.
There are several factors which could cause actual results to differ
materially from those expressed or implied in forward-looking statements.
Among the factors that could cause actual results to differ materially
from those described in the forward-looking statements are BHP Billiton`s
ability to successfully combine the businesses of BHP Billiton and Rio
Tinto and to realise expected synergies from that combination, changes in
the global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in tax
rates and future business combinations or dispositions.
BHP Billiton does not undertake any obligation (except as required by
law, the Listing Rules of ASX Limited or the rules of the UK Listing
Authority and the London Stock Exchange) to revise or update any forward-
looking statement contained in this Announcement, regardless of whether
those statements are affected as a result of new information, future
events or otherwise.
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if
any person is, or becomes, "interested" (directly or indirectly) in one
per cent or more of any class of "relevant securities" of any of BHP
Billiton Plc, BHP Billiton Limited, Rio Tinto plc or Rio Tinto Limited,
all "dealings" in any "relevant securities" of that company (including by
means of an option in respect of, or a derivative referenced to, any such
"relevant securities") must be publicly disclosed by no later than 3.30
pm (London time) on the London business day following the date of the
relevant transaction.
The relevant disclosure must include details of all "interests" or
"dealings" in any class of "relevant securities" of the other company
which is part of its DLC structure. Therefore, if, for example, a
disclosure is being made in respect of a dealing in securities of BHP
Billiton Plc, an accompanying disclosure must also be made of interests
or short positions held in securities of BHP Billiton Limited, even if
the person`s interest or short position is less than one per cent of the
relevant class. The same approach should be adopted in respect of
securities of Rio Tinto plc and Rio Tinto Limited. Therefore, each
disclosure should consist of two Rule 8.3 disclosure forms, one for the
Plc arm of the DLC structure and one for the Limited arm of the DLC
structure, released as one announcement.
This requirement will continue until the date on which the Offers become,
or are declared, unconditional as to acceptances, lapse or are otherwise
withdrawn or on which the "offer period" otherwise ends. If two or more
persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an "interest" in "relevant securities" of
BHP Billiton Plc, BHP Billiton Limited, Rio Tinto plc or Rio Tinto
Limited, they will be deemed to be a single person for the purpose of
Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of either BHP Billiton or Rio Tinto by BHP Billiton or Rio
Tinto, or by any of their respective "associates", must be disclosed by
no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such
securities in issue, can be found on the UK Panel`s website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long
economic exposure, whether conditional or absolute, to changes in the
price of securities. In particular, a person will be treated as having an
"interest" by virtue of the ownership or control of securities, or by
virtue of any option in respect of, or derivative referenced to,
securities.
Terms in quotation marks are defined in the Code, which can also be found
on the UK Panel`s website. If you are in any doubt as to whether or not
you are required to disclose a "dealing" under Rule 8, you should consult
the UK Panel.
6 February 2008
Not for release, publication or distribution in or into Japan
BHP BILLITON OFFER FOR RIO TINTO
BHP Billiton Limited Offers for Rio Tinto Plc and for Rio Tinto Limited
1. Introduction
The Board of BHP Billiton believes that it is compelling and logical to
combine BHP Billiton and Rio Tinto and that the combination will deliver
substantial benefits to both BHP Billiton and Rio Tinto shareholders. In
particular, the Board believes that its Offers to acquire Rio Tinto would
deliver significantly greater benefits to the shareholders of Rio Tinto
than Rio Tinto could otherwise achieve on its own and, due to the all-
share nature of the Offers, allow Rio Tinto shareholders to participate
in the underlying assets of both groups. Following completion of the
Acquisition, Rio Tinto shareholders would own approximately 44 per cent
of the Enlarged Group compared to the approximately 36 per cent level
represented by the market capitalisations of the companies prior to the
approach by BHP Billiton to Rio Tinto and would therefore also receive
approximately 44 per cent of all future synergies (assuming full
acceptance of the Offers on a fully diluted basis).
Since BHP Billiton`s announcement on 8 November 2007 that it had made a
proposal to Rio Tinto on 1 November 2007 to combine the two groups, BHP
Billiton has undertaken extensive consultations with the shareholders and
stakeholders of both Rio Tinto and BHP Billiton which have indicated a
clear understanding of the industrial logic of such a combination and
assisted BHP Billiton in determining the terms of the Offers being made
today to the shareholders of Rio Tinto. These terms represent compelling
value for Rio Tinto shareholders and a substantial increase over the
initial proposal made to the Board of Rio Tinto.
Accordingly the Board of BHP Billiton is announcing today the terms of
two inter-conditional Offers by BHP Billiton Limited for Rio Tinto plc
and Rio Tinto Limited. This Announcement relates to both the Rio Tinto
plc Offer and the Rio Tinto Limited Offer.
2. The Rio Tinto plc Offer
The Rio Tinto plc Offer will be structured as an offer by BHP Billiton
Limited for Rio Tinto plc:
- 3.4 BHP Billiton shares for each Rio Tinto plc Share;
- Basic entitlement to 80 per cent BHP Billiton Plc Shares and 20 per
cent BHP Billiton Limited Shares;
- Mix and Match Facility; and
- Free Share Sale Facility for New BHP Billiton Limited Shares for Rio
Tinto plc Shareholders who hold fewer than 25,000 Rio Tinto plc Shares.
The Mix and Match Facility would allow Rio Tinto plc Shareholders to
elect to receive a higher proportion of New BHP Billiton Plc Shares or
New BHP Billiton Limited Shares than the basic entitlement affords.
However, the total number of New BHP Billiton Plc Shares and New BHP
Billiton Limited Shares to be issued to Rio Tinto plc Shareholders in
aggregate under the Rio Tinto plc Offer will not be varied as a result of
elections made under the Mix and Match Facility.
Accordingly, BHP Billiton Limited`s ability to satisfy elections made by
Rio Tinto plc Shareholders under the Mix and Match Facility will depend
upon other Rio Tinto plc Shareholders making offsetting elections. To
the extent that elections for New BHP Billiton Plc Shares or New BHP
Billiton Limited Shares cannot be satisfied in full, they will be scaled
back on a pro rata basis.
As a result, any Rio Tinto plc Shareholder who makes a valid election to
receive more than his/her basic entitlement to either New BHP Billiton
Limited Shares or New BHP Billiton Plc Shares will not know the exact
proportion of New BHP Billiton Limited Shares and New BHP Billiton Plc
Shares he/she will receive until settlement of his/her consideration
under the Rio Tinto plc Offer.
Any Rio Tinto plc Shareholder who does not make an election under the Mix
and Match Facility will receive 80 per cent New BHP Billiton Plc Shares
and 20 per cent New BHP Billiton Limited Shares in accordance with the
basic terms of the Rio Tinto plc Offer.
Further details of the Mix and Match Facility will be included in the Rio
Tinto plc Offer Document to be published in connection with the Rio Tinto
plc Offer.
A brief description of the Share Sale Facility is given in paragraph 15
below.
Rio Tinto plc Shareholders will obtain their entitlement to New BHP
Billiton Plc Shares through an automatic exchange mechanism whereby they
will initially be issued with the appropriate number of Interim Shares
which will immediately be exchanged for New BHP Billiton Plc Shares.
BHP Billiton reserves the right to implement the Rio Tinto plc Offer by
way of a scheme of arrangement for Rio Tinto plc or to otherwise amend
the terms of the Rio Tinto plc Offer, subject to the UK Code.
3. US shareholders of Rio Tinto plc
The Rio Tinto plc Offer is to be made to holders of Rio Tinto plc Shares
who are located in the US and to all holders of Rio Tinto plc ADRs,
wherever located (not solely US holders of ADRs) by means of the US
Offer, which forms part of the Rio Tinto plc Offer. The treatment of
holders of Rio Tinto plc ADRs will generally be comparable to the
treatment of holders of Rio Tinto plc Shares discussed in this
Announcement, except that the consideration such Rio Tinto ADR holders
receive will ultimately be in the form of new BHP Billiton Limited ADRs
and new BHP Billiton Plc ADRs. The terms of the US Offer will be set
forth in a Registration Statement on Form F-4 which BHP Billiton plans to
file with the SEC and which will need to be declared effective by the SEC
prior to the issuance of any securities pursuant to the US Offer.
Acceptances under the US Offer will count towards any required thresholds
under the Rio Tinto plc Offer.
4. The Rio Tinto Limited Offer
The Rio Tinto Limited Offer will be structured as an offer by BHP
Billiton Limited for Rio Tinto Limited. Under the terms of the Rio Tinto
Limited Offer, BHP Billiton will offer Rio Tinto Limited Shareholders 3.4
New BHP Billiton Limited Shares for each Rio Tinto Limited Share.
BHP Billiton reserves the right to implement the Rio Tinto Limited Offer
by way of a scheme of arrangement for Rio Tinto Limited or to otherwise
amend the terms of the Rio Tinto Limited Offer in a way which is not
substantially less favourable to Rio Tinto Limited Shareholders, subject
to the Australian Corporations Act.
5. Value of the Offers
BHP Billiton`s offer to acquire Rio Tinto
On the basis of the closing prices of a BHP Billiton Limited Share of
A$46.10 and a BHP Billiton Plc Share of ?18.31 on 31 October 2007 (being
the date immediately prior to BHP Billiton`s approach to Rio Tinto), the
Offers represent:
- Total consideration of US$173.6 billion to Rio Tinto shareholders; and
- A premium of 42 per cent to the combined market capitalisations of Rio
Tinto Limited and Rio Tinto plc on 31 October 2007 of US$122.1 billion.
Based on the volume weighted average prices of BHP Billiton Limited and
BHP Billiton Plc Shares for the month ended 31 October 2007, the Offers
represent:
- Total consideration of US$171.3 billion to Rio Tinto shareholders; and
- A premium of 45 per cent to the combined volume weighted average market
capitalisations of Rio Tinto Limited and Rio Tinto plc over the same
period.
Based on BHP Billiton`s closing share prices on 4 February 2008 (being
the last practicable date prior to this Announcement), the total
consideration offered to shareholders of Rio Tinto Limited and Rio Tinto
plc is US$147.4 billion, which represents a premium of approximately 21
per cent to the combined market capitalisations of Rio Tinto Limited and
Rio Tinto plc on 8 November 2007 and 7 November 2007, respectively, being
market capitalisations reflecting closing prices of Rio Tinto Limited and
Rio Tinto plc shares immediately prior to BHP Billiton`s announcement on
8 November 2007.
Following completion of the Acquisition, Rio Tinto shareholders would own
approximately 44 per cent of the combined issued ordinary share capital
of BHP Billiton Limited and BHP Billiton Plc (assuming full acceptance of
the Offers on a fully diluted basis and excluding any intra-DLC cross-
holdings). This level of pro forma ownership would represent an increase
to Rio Tinto`s contribution to the combined market capitalisation from
approximately 36 per cent based on the closing share prices on 31 October
2007 (the date immediately prior to the approach by BHP Billiton to Rio
Tinto).
Rio Tinto plc Offer
On the basis of the closing prices of a BHP Billiton Limited Share of
A$46.10 and a BHP Billiton Plc Share of ?18.31 on 31 October 2007 (being
the last practicable date prior BHP Billiton`s approach to Rio Tinto),
the Rio Tinto plc Offer values:
- Each Rio Tinto plc Share at approximately ?63.79; and
- The issued ordinary share capital of Rio Tinto plc at approximately
?63.6 billion.
On the basis of the closing prices of a BHP Billiton Limited Share of
A$39.32 and a BHP Billiton Plc Share of ?16.49 on 4 February 2008 (being
the last practicable date prior to this Announcement), the Rio Tinto plc
Offer values:
- Each Rio Tinto plc Share at approximately ?57.16; and
- The issued ordinary share capital of Rio Tinto plc at approximately
?57.0 billion.
Rio Tinto Limited Offer
On the basis of the closing price of a BHP Billiton Limited Share of
A$46.10 on 31 October 2007 (being the last date prior to BHP Billiton`s
approach to Rio Tinto), the Rio Tinto Limited Offer values each Rio Tinto
Limited Share at A$156.74 and the issued ordinary share capital of Rio
Tinto Limited at A$44.8 billion.
On the basis of the closing price of a BHP Billiton Limited Share of
A$39.32 on 4 February 2008 (being the last practicable date prior to this
Announcement), the Rio Tinto Limited Offer values each Rio Tinto Limited
Share at approximately A$133.69 and the issued ordinary share capital of
Rio Tinto Limited at approximately A$38.2 billion.
6. Fractional entitlements
No fractions of New BHP Billiton Limited Shares or Interim Shares will be
issued to holders of Rio Tinto plc Shares or Rio Tinto Limited Shares.
Any fractional entitlements will be rounded up or down to the nearest
whole number (with fractional entitlements to 0.5 of a New BHP Billiton
Limited Share or of an Interim Share being rounded up).
7. Effect of Acquisition on the share capital of BHP Billiton Plc and BHP
Billiton Limited
The Acquisition would result in the issue of approximately:
- 2,265,767,683 New BHP Billiton Limited Shares, representing
approximately 40 per cent of the issued ordinary share capital of BHP
Billiton Limited following completion of the Acquisition (assuming full
acceptance of the Offers on a fully diluted basis including the Rio Tinto
Limited Cross-holding); and
- 2,739,049,449 New BHP Billiton Plc Shares, representing approximately
55 per cent of the issued ordinary share capital of BHP Billiton Plc
following completion of the Acquisition (assuming full acceptance of the
Rio Tinto plc Offer on a fully diluted basis).
Following the Acquisition, on the same basis, the combined issued
ordinary share capital of BHP Billiton Limited and BHP Billiton Plc will
have increased approximately 90 per cent from the position as it is
today. Rio Tinto shareholders will hold approximately 44 per cent of this
enlarged publicly-held share capital (assuming full acceptance of the
Offers on a fully diluted basis).
8. Background to and reasons for the Acquisition
The Board of BHP Billiton believes that the fit between the two companies
in terms of values, strategy, asset mix and quality, as well as culture
is without comparison in the diversified natural resources industry. Each
company has a portfolio of large-scale, low-cost, long-life assets that
are highly complementary and, when combined, would represent the leading
portfolio of high quality assets in the industry.
* Unlocking value
Significant opportunities to release value through complementary and
overlapping assets
BHP Billiton believes the combined portfolio would deliver benefits that
are only achievable through a combination of BHP Billiton and Rio Tinto
as a result of the common and overlapping presence in a number of major
resource basins and joint ownership interests. This relatively high
degree of overlap is unique in the industry and is expected to provide
opportunities for significant value creation through economies of scale,
sharing of infrastructure and removal of duplication. Examples include:
- Faster and more efficient development of the combined iron ore
resources in Western Australia;
- Optimisation of thermal coal operations in the Hunter Valley,
Australia;
- More efficient development of metallurgical coal operations in the
Bowen Basin, Australia; and
- Improved development of brownfield and greenfield opportunities in
industrial minerals in Southern Africa.
Greater opportunities to meet the challenges of growing demand
BHP Billiton believes by combining the two development portfolios and
more effectively utilising resources and infrastructure, the Enlarged
Group will be able to deliver an improved supply-side response to meet
the growing demand from customers by providing greater volumes on an
accelerated basis. It will also be supported through greater abilities
to develop new production and optimise supply logistics through blending
and better delivery options.
Enhanced delivery of future growth options
Rio Tinto and BHP Billiton are both seeking to develop new resources in
geographies that frequently have high infrastructure needs and other
associated costs, as well as increased risks. Through Rio Tinto and BHP
Billiton`s extensive experience and resources, the Enlarged Group would
have a greater ability to develop efficiently the next generation of
large-scale projects in these new regions for the benefit of its
customers, the communities in which it operates, and its shareholders.
Management team with enhanced strength and depth
The Enlarged Group would have a world-class management and operational
team with significant strength and depth across all levels of the
organisation. BHP Billiton and Rio Tinto are both committed to the
pursuit of excellence and the highest standards in safety and
sustainability with a focus on global best practice in community and
environment. The Enlarged Group will continue this commitment.
As a result of this alignment the Board of BHP Billiton is confident of
being able to integrate the two organisations smoothly and efficiently
following the Acquisition. Key management positions would be filled by
drawing on the best of both management teams and the development of the
best people from both companies would be considered an important driver
of the ongoing success of the combination.
* Substantial quantified synergies
The combination of BHP Billiton and Rio Tinto is expected to create
substantial value through both cost savings and volume-driven benefits
that would arise as result of the Acquisition. These synergies, due to
the substantial overlap in neighbouring and jointly-owned operations, are
only available through the combination of BHP Billiton and Rio Tinto. In
particular, BHP Billiton expects:
- US$1.7 billion nominal per annum of cost savings in the third full year
following completion, achieved through removal of duplication as well as
procurement and operating efficiency savings; and
- Further EBITDA enhancement of US$2.0 billion nominal per annum in the
seventh full year following completion, driven primarily by the
acceleration of volumes to customers.
In the seventh full year following completion this, therefore, is
expected to result in a total incremental EBITDA of US$3.7 billion
nominal per annum of quantified synergies.
The total one-off implementation cash costs related to achieving these
synergies are expected to amount to US$0.65 billion over the first two
years following completion.
This estimate of synergies has been reported on under the UK Code by KPMG
and by BHP Billiton`s financial adviser Goldman Sachs International.
Copies of their letters are included in parts (a) and (b) respectively of
Appendix V.
The estimate of synergies should be read in conjunction with notes (s) to
(w) of Appendix IV.
The Board of BHP Billiton also expects that the Acquisition would be
accretive to BHP Billiton`s earnings per share (after adjusting for the
proposed share buyback and excluding depreciation on the write-up of Rio
Tinto`s assets) and cashflow per share (after adjusting for the proposed
share buyback) from the first full fiscal year following completion of
the Acquisition.
* All-share Offers that allow continued participation by Rio Tinto
shareholders
The Acquisition is structured as an all-share transaction implemented
through two inter-conditional Offers. As a result Rio Tinto shareholders
will be able to participate in the Enlarged Group and gain exposure to
the world`s premier diversified natural resources company with its
strengthened asset portfolio and greater diversification. Rio Tinto
shareholders will benefit from the premium implied by the Offers and the
pro rata access to the economic benefits of the combination through their
ownership of approximately 44 per cent of the Enlarged Group (assuming
full acceptance of the Offers on a fully diluted basis).
* Deliverable Offers - Manageable anti-trust issues not expected to have
a material impact
BHP Billiton has undertaken extensive in-depth analysis on the potential
impact of the Acquisition on the markets in which BHP Billiton and Rio
Tinto participate. BHP Billiton believes that this analysis shows that
the potential anti-trust issues are manageable and should not impact in
any material way either the future prospects of the Enlarged Group or the
amount and achievability of synergies.
In fact, BHP Billiton believes that the cost savings, expanded growth
options and speed-to-market benefits available to the Enlarged Group
would provide material pro-competitive benefits in key commodity markets
to the benefit of BHP Billiton`s and Rio Tinto`s customers. As a result,
BHP Billiton is confident that it will be able to obtain satisfactory
regulatory clearances from the various regulatory bodies.
BHP Billiton has been progressing substantive pre-notification
discussions with the European Commission with respect to the EU merger
control process and expects to notify the transaction formally to the
European Commission in the first quarter of 2008. Preliminary contact
has also been made with the relevant regulatory authorities in Australia,
the US, Canada and South Africa and formal notifications will be filed in
those jurisdictions in due course. BHP Billiton expects to receive the
necessary clearances during the second half of 2008.
* Preservation of the DLC structure allowing access for shareholders to
both markets
The DLC structure has historically served BHP Billiton and Rio Tinto
well, allowing shareholders to participate in both the Australian and UK
markets with equivalent economic ownership of the underlying assets. BHP
Billiton is proposing to maintain this structure to allow shareholders to
participate in the Enlarged Group in either market, providing equivalent
economic ownership regardless of the market in which a shareholder
invests.
* Enhanced cash flow and a strong capital structure
The Board of BHP Billiton believes that the strength and diversification
of the asset portfolio of the Enlarged Group will enable it to deliver
strong long-term performance through the commodity cycle. As a result,
BHP Billiton`s intention is to maintain a single A rating for the
Enlarged Group. Combined with its strong cash flow this target is
expected to provide financial flexibility to return significant capital
to shareholders in the future while maintaining flexibility for future
investment and maintaining BHP Billiton`s current progressive dividend
policy.
In line with this target, and if the Offers are successful(5), BHP
Billiton proposes to return up to US$30 billion to shareholders through a
share buyback within 12 months of completion of the Acquisition. The
proposed share buyback and any refinancing that might arise as a result
of the Acquisition, including of Rio Tinto`s remaining borrowings, will
be funded through a combination of sources comprising a committed bank
financing facility of US$55 billion, together with cash flow from
operations, asset disposal proceeds from the continued optimisation of
BHP Billiton`s asset portfolio and if required debt financing.
9. Dividends
BHP Billiton intends to maintain its current progressive dividend policy
which seeks steadily to increase or at least to maintain the dividend in
US dollars at each half yearly payment provided that BHP Billiton
generates sufficient profit and cash flow to do so.
BHP Billiton Limited will continue to pay dividends in Australian
dollars, British pounds, New Zealand dollars or United States dollars,
depending on the country of residence of the shareholder. BHP Billiton
Plc will continue to pay dividends in British pounds to shareholders on
its principal register in the UK and South African rand to shareholders
on its branch register in South Africa.
10. Information on BHP Billiton
BHP Billiton is headquartered in Melbourne, Australia, and is the world`s
largest global diversified natural resources company. BHP Billiton is
listed on stock exchanges in Australia (ASX), the United Kingdom (LSE),
the United States (NYSE), South Africa (JSE), Germany (Frankfurt) and
Switzerland (Zurich). As at 4 February 2008, BHP Billiton had a market
capitalisation of US$192.0 billion.
BHP Billiton has approximately 39,000 employees working in more than 100
operations in approximately 25 countries. For the financial year ended 30
June 2007, BHP Billiton reported revenue of US$47.5 billion, Underlying
EBIT of US$20.1 billion, net profit attributable to shareholders of
US$13.4 billion and net operating cash flow of US$15.6 billion. As at 30
June 2007, BHP Billiton had net assets of US$29.9 billion.
On 6 February, BHP Billiton released interim results for the half year
ended 31 December, 2007. Key highlights were revenue of US$25.5 billion,
Underlying EBIT of US$9.6 billion, net profit attributable to
shareholders of US$6.0 billion and net operating cash flow of US$7.9
billion.
BHP Billiton operates ten business units or Customer Sector Groups
(CSGs), aligned with the commodities which the company extracts and
markets. The ten CSGs are Aluminium, Base Metals, Uranium, Diamonds and
Specialty Products, Energy Coal, Iron Ore, Manganese, Metallurgical Coal,
Petroleum and Stainless Steel Materials.
* The Aluminium CSG`s (12 per cent of total BHP Billiton FY2007 revenue)
principal activities are the mining of bauxite, refining of bauxite into
alumina and smelting of alumina into aluminium metal. The CSG has
operations in Australia, Brazil, Mozambique, South Africa, and Suriname.
* The Base Metals CSG`s (27 per cent of total BHP Billiton FY2007
revenue) principal activities are the mining of copper, silver, lead,
zinc, molybdenum, uranium (prior to July 2007) and gold. The Base Metals
CSG has operations in Australia, Chile, Peru and the US.
* A separate Uranium CSG was created in July 2007. Its principal
activities are the production and marketing of uranium and the operation
and development of the Olympic Dam ore body. The Uranium CSG`s results
are reported as part of the consolidated Base Metals CSG`s results.
* The Diamonds and Specialty Products CSG`s (two per cent of total BHP
Billiton FY2007 revenue) principal activities are the mining of diamonds
and titanium minerals. The CSG has operations in Canada and South Africa.
* The Energy Coal CSG`s (10 per cent of total BHP Billiton FY2007
revenue) principal activities are the mining and marketing of export
thermal (energy) coal. The CSG has operations in Australia, Colombia,
South Africa and the United States.
* The Iron Ore CSG`s (12 per cent of total BHP Billiton FY2007 revenue)
principal activities are the mining of iron ore from a number of mines.
The CSG`s principal operations are based in the Pilbara region of north
Western Australia and in Brazil.
* The Manganese CSG`s (three per cent of total BHP Billiton FY2007
revenue) principal activities are the mining of manganese ore and
production of manganese metal and alloys. The CSG has operations in
Australia and South Africa.
* The Metallurgical Coal CSG`s (eight per cent of total BHP Billiton
FY2007 revenue) principal activities are the mining of metallurgical coal
in Australia.
* The Petroleum CSG`s (12 per cent of total BHP Billiton FY2007 revenue)
principal activities are oil and gas exploration, production, development
and marketing in Australia, the United Kingdom, the United States,
Algeria, Trinidad and Tobago, and Pakistan.
* The Stainless Steel Materials CSG`s (15 per cent of total BHP Billiton
FY2007 revenue) principal activities are producing nickel concentrate
primarily for the stainless steel industry. The CSG operates a number of
mines, concentrators, smelters and refineries in Australia and Colombia.
11. Current trading and prospects for the BHP Billiton Group
On 6 February, BHP Billiton released interim results for the half year
ended 31 December, 2007. The results presented represent an excellent
operating and financial performance. These results are based on a strong
production performance across the breadth of BHP Billiton`s business,
outstanding cost control in the face of significant cost pressures and
additional volumes from newly commissioned growth projects. BHP
Billiton`s performance has not only benefited from the unique
diversification across petroleum, bulk and non ferrous commodities, but
also the diversification within each of these broad categories. In
particular, record half year earnings results in iron ore and manganese
demonstrated that BHP Billiton was able to capture strong market
conditions in the steel-making sector. Record half year earnings from
petroleum in an environment of strong prices were the result of excellent
management of natural field decline and volume growth from new projects.
BHP Billiton`s Underlying EBIT of US$9.6 billion is an increase of 5.4
per cent over the corresponding period last year (being the 6 months to
31 December 2006). Underlying EBIT margin was 44.4 per cent. Earnings per
share, excluding exceptional items, were up 2.8 per cent at 106.8 US
cents reflecting the benefit of the share buy-back program. This result
has been achieved in an environment in which input prices have increased
significantly and currencies have appreciated strongly. The reduction in
Underlying EBIT, as a result of the weaker US dollar, was US$506 million
more than the corresponding period.
In pursuit of BHP Billiton`s strategy, BHP Billiton continues to focus on
the fundamental drivers of value creation for shareholders: by operating
large, long-life, low cost expandable assets while taking a disciplined
and value-focused approach to pursuing additional organic and non-organic
growth options.
BHP Billiton achieved record or equal record production(6) for seven
major commodities and significantly increased production across a further
six commodities. Production records were achieved by 12 assets in six of
BHP Billiton`s Customer Sector Groups. This performance reinforces BHP
Billiton`s track record of consistent growth on the back of predictable
project delivery coming from a deep inventory of projects that will
continue to underpin BHP Billiton`s growth plans. This increased
production from high returning assets has allowed BHP Billiton to capture
the benefits of strong first half conditions in key commodity markets.
First production was successfully achieved at seven major projects:
Genghis Khan, Atlantis South and Stybarrow (oil and gas), Koala
Underground (diamonds), Pinto Valley (copper in concentrate), Rapid
Growth Project 3 (iron ore) and Ravensthorpe (contained nickel in
concentrate). BHP Billiton expects to deliver significant volume growth
in the second half of FY 2008 with continued ramp up of these projects,
and the expected commissioning of an additional four projects.
During the period BHP Billiton approved three new projects; the Kipper
project (gas), Klipspruit (energy coal), the Gemco expansion project
(manganese concentrate) and in January 2008, BHP Billiton approved the
Newcastle Third Port Project (energy coal export capacity). All of these
projects will support continued growth across a number of BHP Billiton`s
businesses in future years.
12. Information on Rio Tinto
Rio Tinto is headquartered in London, United Kingdom and is listed on the
Australian, London and New York stock exchanges. As at 4 February, 2008,
Rio Tinto had a market capitalisation of US$142.2 billion.
Rio Tinto has operations worldwide with strong representation in
Australia and North America and significant businesses in South America,
Asia, Europe and Southern Africa. Through its global operations, Rio
Tinto produces iron ore, metallurgical and thermal coal, copper, bauxite,
alumina, aluminium, uranium and diamonds as well as other base metals and
industrial minerals.
Rio Tinto has recently expanded its aluminium operations with the
acquisition of Alcan, creating the world`s leading supplier of aluminium.
Rio Tinto has separately indicated that it intends to dispose of several
assets including its packaging business, engineered products business and
various resource assets.
13. Management and employees
Shortage of labour is an ongoing issue in the global resources sector.
The combination of BHP Billiton and Rio Tinto will allow the Enlarged
Group to deploy this scarce resource more effectively, removing overlap
and freeing people to focus on the highest value opportunities.
BHP Billiton attaches great importance to the skills and experience of
the existing management and employees of Rio Tinto and believes that they
will benefit significantly from the greater opportunities that the
Enlarged Group can provide for them. The existing employment rights of
all management and employees of Rio Tinto will be fully safeguarded.
14. Rio Tinto Share Schemes
The Rio Tinto plc Offer will extend to any Rio Tinto plc Shares
unconditionally allotted or issued fully paid (or credited as fully paid)
upon exercise of options granted under the Rio Tinto plc Share Schemes
whilst the Rio Tinto plc Offer remains open for acceptance or before such
earlier date as BHP Billiton, subject to the UK Code and other applicable
laws, may decide. To the extent that such options are not so exercised,
and if the Rio Tinto plc Offer becomes or is declared unconditional in
all respects, BHP Billiton will make appropriate proposals to option
holders under the Rio Tinto plc Share Schemes in due course.
The Rio Tinto Limited Offer will extend to any Rio Tinto Limited Shares
unconditionally allotted or issued fully paid (or credited as fully paid)
while the Rio Tinto Limited Offer remains open for acceptance upon
exercise of options or securities granted under the Rio Tinto Limited
Share Schemes, being options or securities in existence as at the Rio
Tinto Limited Register Date. If BHP Billiton becomes entitled to acquire
such options or securities compulsorily under Part 6A.2 of the Australian
Corporations Act, BHP Billiton intends to proceed with compulsory
acquisition of those options or securities.
15. Share Sale Facility under the Rio Tinto plc Offer for New BHP
Billiton Limited Shares
To the extent consistent with applicable law in relevant jurisdictions,
BHP Billiton intends to arrange for a free Share Sale Facility to be made
available as part of the Rio Tinto plc Offer in relation to the New BHP
Billiton Limited Shares issued to Rio Tinto plc Shareholders who (i) hold
fewer than 25,000 Rio Tinto plc Shares; and (ii) do not elect for New BHP
Billiton Limited Shares under the Mix and Match Facility in excess of
their basic entitlements. Qualifying Rio Tinto plc Shareholders will be
able to sell all, but not some, of the New BHP Billiton Limited Shares
they receive under the Rio Tinto plc Offer without incurring any charges
(including dealing charges and settlement charges) and to receive the
proceeds of the sale in British pounds. The Share Sale Facility will not
be available to Rio Tinto plc Shareholders resident in jurisdictions
where making such a facility available is unlawful. Further details of
this free Share Sale Facility will be provided in the Rio Tinto plc Offer
Document.
16. Taxation
It is expected that capital gains tax rollover relief will be available
to UK resident shareholders accepting the Rio Tinto plc Offer in respect
of their New BHP Billiton Plc Shares and New BHP Billiton Limited Shares
subject to approximately 70 per cent acceptances under the Rio Tinto plc
Offer.
If BHP Billiton Limited is able to proceed with the compulsory
acquisition of any remaining Rio Tinto Limited Shares, BHP Billiton
Limited expects capital gains tax rollover relief to be available to
Australian resident shareholders accepting the Rio Tinto Limited Offer.
Given the size of the Rio Tinto Limited Cross-holding, to reach the
compulsory acquisition thresholds in relation to Rio Tinto Limited:
- Some or all of this holding will need to be accepted into the Rio Tinto
Limited Offer by Rio Tinto plc; or
- ASIC will need to provide relief from the Australian Corporations Act.
ASIC has indicated that it would consider an application for this relief
on its merits if it becomes apparent that the Rio Tinto Limited Cross-
holding has a clear defensive effect.
Shareholders accepting the Rio Tinto plc Offer or Rio Tinto Limited Offer
who are US citizens or residents are expected to be subject to US tax on
the receipt of the Rio Tinto plc Offer and the Rio Tinto Limited Offer
consideration, respectively.
17. Overseas shareholders
The availability of the Rio Tinto plc Offer and Rio Tinto Limited Offer
to persons not resident in the UK, Australia or the US may be affected by
the laws of the relevant jurisdiction where they are resident. Rio Tinto
shareholders who are not resident in the UK, Australia or the US should
inform themselves about, and observe, any applicable requirements.
The Offers are not being made in or into, and are not capable of
acceptance in Japan or any other jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by the use of
the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and/or the internet) of
interstate or foreign commerce, or any facility of a national securities
exchange, of any such jurisdiction.
The Rio Tinto Limited Offer will not necessarily be registered in any
jurisdiction outside Australia (unless an applicable foreign law treats
it as registered as a result of the BHP Billiton Bidder`s Statement being
lodged with ASIC). Any shareholder who wishes to accept the Rio Tinto
Limited Offer must first satisfy itself that such acceptance is permitted
by any foreign law applicable to that shareholder. If any authority or
clearance under Australian law is required to enable a shareholder in Rio
Tinto Limited to receive any consideration under the Rio Tinto Limited
Offer, any acceptance of the Rio Tinto Limited Offer will not create any
right to receive that consideration unless and until all requisite
authorities or clearances have been received. The Rio Tinto Limited
Offer may provide that securities which would otherwise be issued to an
accepting shareholder resident in a jurisdiction outside Australia may be
vested in a nominee and sold, with the net proceeds of sale remitted to
the accepting shareholder.
18. Shareholder approval
In view of the size of Rio Tinto, among other things, it will be
necessary for BHP Billiton shareholders to approve the Acquisition.
Accordingly, the necessary resolutions will be put to an extraordinary
general meeting of each of BHP Billiton Limited and BHP Billiton Plc once
the Pre-conditions have been satisfied or waived.
19. Timing
The Rio Tinto plc Offer, Rio Tinto Limited Offer and the posting of the
documents related to each are subject to satisfaction or waiver of the
Pre-conditions which relate to the obtaining of certain clearances in
Europe, Australia, the United States, Canada and South Africa. BHP
Billiton intends to proceed with the Offers through despatching the Rio
Tinto plc Offer Document and the US Offer document, in the case of the
Rio Tinto plc Offer, and the BHP Billiton Bidder`s Statement, in the case
of the Rio Tinto Limited Offer, as soon as practicable after the
satisfaction or waiver of the Pre-conditions. The necessary clearances
are expected to be obtained during the second half of 2008.
20. Compulsory acquisition, delisting and cancellation of voting
Rio Tinto plc Offer
If the Rio Tinto plc Offer becomes or is declared unconditional in all
respects, it is the intention of BHP Billiton, assuming it becomes so
entitled, to acquire compulsorily any outstanding Rio Tinto plc Shares
pursuant to the provisions of the UK Companies Act 2006, including any
Rio Tinto plc Shares underlying the Rio Tinto plc ADRs.
Following the Rio Tinto plc Offer becoming or being declared
unconditional in all respects and sufficient acceptances being received,
BHP Billiton intends to procure that Rio Tinto will apply for the
cancellation of the listing of the Rio Tinto plc Shares on the Official
List and trading on the London Stock Exchange for listed securities and
the delisting of the Rio Tinto plc ADRs on the New York Stock Exchange.
De-listing is likely to reduce significantly the liquidity and
marketability of any Rio Tinto plc Shares or Rio Tinto plc ADRs in
respect of which the Rio Tinto plc Offer has not been accepted.
Following the delisting of the Rio Tinto plc ADRs from the New York Stock
Exchange, BHP Billiton intends to procure that Rio Tinto files with the
SEC a request that Rio Tinto`s reporting obligations under the Exchange
Act be terminated, if and when Rio Tinto plc is eligible to do so.
Rio Tinto Limited Offer
If the Rio Tinto Limited Offer becomes or is declared unconditional in
all respects, it is the intention of BHP Billiton, assuming it becomes so
entitled, to acquire compulsorily any outstanding Rio Tinto Limited
Shares other than the Rio Tinto Limited Cross-holding in accordance with
the provisions of the Australian Corporations Act. BHP Billiton may also
compulsorily acquire some or all of the Rio Tinto Limited Cross-holding.
If BHP Billiton becomes entitled to acquire any other outstanding Rio
Tinto Limited securities held other than by a member of the Rio Tinto
Group compulsorily under the Australian Corporations Act, BHP Billiton
intends to proceed with such compulsory acquisition.
BHP Billiton intends to procure that Rio Tinto Limited is removed from
the official list of ASX following completion of compulsory acquisition
of the Rio Tinto Limited Shares.
21. Listing, dealings and settlement
Application will be made for the New BHP Billiton Plc Shares to be
admitted to the Official List of the UK Listing Authority and to trading
on the London Stock Exchange`s market for listed securities.
It is expected that admission will become effective and that dealings for
normal settlement in the New BHP Billiton Plc Shares will commence
shortly following the date on which the Rio Tinto plc Offer becomes or is
declared unconditional in all respects (save only for the admission of
such shares becoming effective). The New BHP Billiton Plc Shares will,
when issued, be fully paid and rank pari passu in all respects with the
existing BHP Billiton Plc Shares, including, where the record date for
determining entitlements is on or after the date of issue of New BHP
Billiton Plc Shares, the right to all dividends and other distributions
(if any) declared, made or paid by BHP Billiton Plc save that BHP
Billiton reserves the right to withhold any dividend not yet paid for the
half year ended 31 December 2008 or any subsequent period if Rio Tinto
shareholders would otherwise receive a Rio Tinto dividend and a BHP
Billiton dividend for the same period or a substantial part of that
period.
In addition, application will be made to the New York Stock Exchange for
listing of the new BHP Billiton Limited ADRs (representing New BHP
Billiton Limited Shares) and the new BHP Billiton Plc ADRs (representing
New BHP Billiton Plc Shares) being offered in the US Offer.
Application will be made for the New BHP Billiton Limited Shares to be
admitted to quotation on ASX. It is expected that admission will become
effective upon issue and allotment of the New BHP Billiton Limited Shares
to accepting Rio Tinto shareholders and provision of standard information
to ASX, and that such New BHP Billiton Limited Shares may be traded on
ASX as from that time. The New BHP Billiton Limited Shares will, when
issued, be fully paid and rank pari passu in all respects with existing
BHP Billiton Limited Shares, including, where the record date for
determining entitlements is on or after the date of issue of New BHP
Billiton Limited Shares, the right to all dividends and other
distributions (if any) declared, made or paid by BHP Billiton Limited
save that BHP Billiton reserves the right to withhold any dividend not
yet paid for the half year ending 31 December 2008 or any subsequent
period if Rio Tinto shareholders would otherwise receive a Rio Tinto
dividend and a BHP Billiton dividend for the same period or a substantial
part of that period.
22. Regulatory Relief for the Rio Tinto Limited Offer
BHP Billiton has consulted with, and obtained certain relief from ASIC in
connection with the Offer. The relevant items of relief will be
available on BHP Billiton`s website in due course.
The key items of relief which have been obtained to date may be
summarised as follows:
ASIC has granted modifications and exemptions of the Australian
Corporations Act which:
(i) Relieve BHP Billiton from the requirement in the Australian
Corporations Act to despatch the Rio Tinto Limited Offer within two
months after the Announcement Date, provided that:
(b) BHP Billiton Limited makes the Offers set out in this Announcement;
(c) The announcement indicates (as BHP Billiton now confirms to be the
case) that the Rio Tinto Limited Offer and the Rio Tinto plc Offer will
be declared free of defeating conditions or will otherwise become wholly
unconditional at or about the same time;
(d) Within 1 month of 6 February 2008, BHP Billiton provides ASIC with a
deed (that cannot be varied or revoked without ASIC`s consent) which
provides that:
(i) BHP Billiton Limited use reasonable endeavours to satisfy the Pre-
conditions as soon as practicable and immediately notifies ASX of
material developments in satisfaction or waiver of the Pre-conditions;
(ii) the BHP Billiton Bidder`s Statement is despatched within one month
after the date on which the last of the Pre-conditions is satisfied or
waived and at or about the same time as the Rio Tinto plc Offer Documents
are despatched; and
(iii) the Rio Tinto Limited Offer and the Rio Tinto plc Offer become
wholly unconditional at or about the same time.
The effect of this relief is that BHP Billiton will not be required to
despatch the Bidder`s Statement in relation to Rio Tinto Limited until
one month after the date on which the last of the Pre-conditions is
satisfied or waived.
(ii) Modify (provided the requirements in (a) to (c) of (i) above are
met):
(a) the minimum bid price rule in section 621 such that it applies to
consideration provided during the four month period prior to the
Announcement Date until the date of the bid;
(b) the rule against escalators prohibiting benefits linked to bids and
proposed bids in section 622 such that it applies during the period six
months prior to the Announcement Date until the date of the bid;
(c) the maximum offer period in section 624 such that the period between
the Announcement Date and the close of the Rio Tinto Limited Offer Period
is no longer than 14 months (ASIC has indicated that it would consider
any application to extend this period on its merits); and
(d) the Bidder`s Statement content requirements set out in
section 636(1)(h) and (i) such that each requirement applies to the
period four months prior to the Announcement Date until the date of the
bid.
ASIC has also made "in principle" decisions to grant relief which will:
(i) Permit acquisitions of relevant interests in Rio Tinto Limited Shares
which occur by reason of acceptance of the Rio Tinto plc Offer on certain
conditions, modifying ASIC Instrument 01/1041 dated 8 August 2001 (the
2001 Instrument). The 2001 Instrument was obtained by Rio Tinto Limited
and permits an acquisition of a relevant interest in Rio Tinto Limited
Shares to occur as a result of a procedure in relation to Rio Tinto plc
Shares, provided that, among other things, Rio Tinto Limited Shareholders
and Rio Tinto plc Shareholders are afforded equivalent treatment in terms
of the consideration offered for their shares (having regard to the
Equalisation Ratio, as defined in the constitution of Rio Tinto Limited),
the information provided to them, the time to consider the offer or
procedure, the conditions to which the procedure is subject and the other
terms of the procedure.
ASIC has indicated that the requirements of the modified ASIC relief will
include:
(e) the scrip consideration offered to each Rio Tinto Limited Shareholder
on the one hand and each Rio Tinto plc Shareholder on the other hand
being the same number of BHP Billiton shares (either BHP Billiton Limited
Shares or BHP Billiton Plc Shares or a combination of both); and
(f) each of BHP Billiton and Rio Tinto remaining DLCs and retaining an
Equalisation Ratio of one to one during the Rio Tinto Limited Offer
Period.
(ii) Provide that, where the issue of BHP Billiton Limited Shares
(relevant shares) as consideration for acceptance of Rio Tinto Limited
Shares into the Rio Tinto Limited Offer or for compulsory acquisition of
Rio Tinto Limited Shares would otherwise be void under section 259C(1) of
the Australian Corporations Act, grant an exemption under section 259C(2)
is granted on condition that:
(g) BHP Billiton Limited and BHP Billiton Plc and their controlled
entities will not exercise any voting rights, nor control or influence
the exercise of voting rights, attaching to the relevant shares; and
(h) If a third party makes an offer for BHP Billiton Limited ordinary
shares, BHP Billiton will convene a meeting, as required by ASIC, to
consider approving acceptance of the relevant shares into the offer.
This relief could be applicable if Rio Tinto plc or a controlled entity
were to accept the Rio Tinto Limited Offer, or BHP Billiton Limited were
to initiate compulsory acquisition in relation to Rio Tinto Limited
Shares held by Rio Tinto plc or a controlled entity, at a time when Rio
Tinto plc was a controlled entity of BHP Billiton Limited.
(iii) Provide prospectus, secondary sale and licensing relief in
accordance with ASIC Consultation Paper 79.
23. General
Save as disclosed below, as at the date of this Announcement, neither BHP
Billiton nor any of the directors of BHP Billiton, nor, so far as the
directors of BHP Billiton are aware, any person acting in concert with
BHP Billiton, has any interest in or right to subscribe for any Rio Tinto
shares or has any short position including any short positions under a
derivative, any agreement to sell, or any delivery obligation or right to
require another person to take delivery in Rio Tinto plc Shares or Rio
Tinto Limited Shares or has borrowed or lent any Rio Tinto plc Shares or
Rio Tinto Limited Shares (save for any borrowed shares which have either
been on-lent or sold):
Name Number of shares
Rio Tinto Rio Tinto ADRs
Limited Plc Shares
Shares
Goldman Sachs & Co. - - 312 (short)
Goldman Sachs & Co. - - 3,174
(as discretionary
manager)
Goldman Sachs - 2,800 -
International (as
discretionary
manager)
UBS 234,941 148,024 -
Merril Lynch - 5,385,355 -
International
Merril Lynch, - 308,978 -
Pierce, Fenner &
Smith
HSBC 814,913 20,675 11
772,004
(short)
Don Argus 78,675(7) - -
David Crawford 3,025(8) - -
David Morgan 28,104(9) - -
The Rio Tinto plc Offer will comply with the applicable rules and
regulations of the UK Listing Authority, the London Stock Exchange and
the UK Code. The Rio Tinto plc Offer will be governed by English Law and
will be subject to the jurisdiction of the English courts and the Rio
Tinto plc Offer Conditions and further terms set out in Appendix II, and
the full terms set out in the Rio Tinto plc Offer Document. In addition,
the US Offer component of the Rio Tinto plc Offer is subject to, and will
comply with, applicable requirements of US securities laws. BHP Billiton
will only be able to invoke a Pre-condition, Rio Tinto plc Offer
Condition and/or a Rio Tinto Limited Offer Condition with the prior
approval of the UK Panel.
The Rio Tinto Limited Offer will comply with the Australian Corporations
Act (as it applies to BHP Billiton) and the applicable rules of the ASX.
The Rio Tinto Limited Offer will be governed by the law of the State of
Victoria, Australia and will be subject to the jurisdiction of the
Australian Takeovers Panel and the Australian Courts and the Rio Tinto
Limited Offer Conditions and terms set out in Appendix III, and the full
terms set out in the BHP Billiton Bidder`s Statement.
Goldman Sachs International and Gresham Partners are acting as principal
financial advisers to BHP Billiton in relation to the Offers for Rio
Tinto.
BNP Paribas SA ("BNP Paribas"), Citigroup Global Markets Limited
("Citi"), HSBC Bank plc ("HSBC"), Lazard & Co., Limited ("Lazard"),
Merrill Lynch International and UBS (UBS Investment Bank, being UBS AG,
Australia Branch and/or UBS Limited) are also providing financial advice
to BHP Billiton.
The banks participating in the committed bank financing facility of US$55
billion as Mandated Lead Arrangers are: Barclays Capital (the investment
banking division of Barclays Bank PLC); BNP Paribas; Citigroup Global
Markets Limited; Goldman Sachs International; HSBC Bank plc; Banco
Santander, S.A.; and UBS Limited.
Contacts:
Australia
Don Carroll, Investor Relations
Tel: +61 3 9609 2686 Mobile: +61 417 591 938
email: Don.A.Carroll@bhpbilliton.com
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
United Kingdom
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131 Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com
South Africa
Alison Gilbert, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Alison.Gilbert@bhpbilliton.com
Appendix I contains the Pre-conditions to the Offers.
Appendix II contains the Rio Tinto plc Offer Conditions and certain
further terms of the Rio Tinto plc Offer.
Appendix III contains the Rio Tinto Limited Offer Conditions and certain
further terms of the Rio Tinto Limited Offer.
Appendix IV provides further information on the bases and sources for
certain information contained in this Announcement.
Appendix V sets out supporting letters from KPMG and Goldman Sachs
International relating to the statement of estimated costs savings and
volume-driven benefits.
Appendix VI sets out Definitions contained in the Announcement.
This Announcement is for information purposes only and does not
constitute an offer or invitation to acquire or dispose of any securities
or investment advice in any jurisdiction. Any offer, invitation or
inducement to acquire or dispose of any securities of BHP Billiton Plc,
BHP Billiton Limited, Rio Tinto plc and/or Rio Tinto Limited will be made
solely by means of the BHP Billiton Prospectus, the BHP Billiton Bidder`s
Statement, the Rio Tinto plc Offer Document and associated documents
expected to be published on satisfaction of the Pre-conditions, and any
decision to keep, buy or sell shares in Rio Tinto plc or Rio Tinto
Limited should be made solely on the basis of the information contained
in such documents. In addition, BHP Billiton shareholders are urged to
read the BHP Billiton Prospectus and associated class 1 shareholder
circular/explanatory statement before making any decision regarding the
proposed transaction. The BHP Billiton Prospectus, BHP Billiton Bidder`s
Statement, Rio Tinto plc Offer Document and related documents, once
published, may be obtained from BHP Billiton`s website at
www.bhpbilliton.com or on request from BHP Billiton.
Information Relating to the US Offer for Rio Tinto plc
BHP Billiton plans to register the offer and sale of securities it would
issue to Rio Tinto plc US shareholders and Rio Tinto plc ADR holders by
filing with the SEC a Registration Statement (the "Registration
Statement"), which will contain a prospectus ("Prospectus"), as well as
other relevant materials. No such materials have yet been filed. This
communication is not a substitute for any Registration Statement or
Prospectus that BHP Billiton may file with the SEC.
U.S. INVESTORS AND U.S. HOLDERS OF RIO TINTO PLC SECURITIES AND ALL
HOLDERS OF RIO TINTO PLC ADRs ARE URGED TO READ ANY REGISTRATION
STATEMENT, PROSPECTUS AND ANY OTHER DOCUMENTS MADE AVAILABLE TO THEM
AND/OR FILED WITH THE SEC REGARDING THE POTENTIAL TRANSACTION, AS WELL AS
ANY AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to obtain a free copy of the
Registration Statement and the Prospectus as well as other relevant
documents filed with the SEC at the SEC`s website (http://www.sec.gov),
once such documents are filed with the SEC. Copies of such documents may
also be obtained from BHP Billiton without charge, once they are filed
with the SEC.
Information for US Holders of Rio Tinto Limited Shares
BHP Billiton Limited is not required to, and does not plan to, prepare
and file with the SEC a registration statement in respect of the Rio
Tinto Limited Offer. Accordingly, Rio Tinto Limited Shareholders should
carefully consider the following:
The Rio Tinto Limited Offer will be an exchange offer made for the
securities of a foreign company. Such offer is subject to disclosure
requirements of a foreign country that are different from those of the
United States. Financial statements included in the document will be
prepared in accordance with foreign accounting standards that may not be
comparable to the financial statements of United States companies.
Information Relating to the US Offer for Rio Tinto plc and the Rio Tinto
Limited Offer for Rio Tinto shareholders located in the US
It may be difficult for you to enforce your rights and any claim you may
have arising under the US federal securities laws, since the issuers are
located in a foreign country, and some or all of their officers and
directors may be residents of foreign countries. You may not be able to
sue a foreign company or its officers or directors in a foreign court for
violations of the US securities laws. It may be difficult to compel a
foreign company and its affiliates to subject themselves to a US court`s
judgement.
You should be aware that BHP Billiton may purchase securities of Rio
Tinto plc and Rio Tinto Limited otherwise than under the exchange offer,
such as in open market or privately negotiated purchases.
The Offers are not being made in or into, and are not capable of
acceptance in Japan or any other jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by the use of
the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and/or the internet) of
interstate or foreign commerce, or any facility of a national securities
exchange, of such jurisdiction.
The Rio Tinto Limited Offer will not necessarily be registered in any
jurisdiction outside Australia (unless an applicable foreign law treats
it as registered as a result of the BHP Billiton Bidder`s statement being
lodged with ASIC). Any Rio Tinto Limited Shareholder who wishes to
accept the Rio Tinto Limited Offer must first satisfy itself that such
acceptance is permitted by any foreign law applicable to that
shareholder. If any authority or clearance under Australian law is
required to enable a shareholder in Rio Tinto Limited to receive any
consideration under the Rio Tinto Limited Offer, any acceptance of the
Rio Tinto Limited Offer will not create any right to receive that
consideration unless and until all requisite authorities or clearances
have been received.
Goldman Sachs International, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively
as principal financial adviser and corporate broker for BHP Billiton in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the customers of Goldman Sachs International or for providing advice in
relation to matters described in this Announcement.
Gresham Partners, which holds an Australian Financial Services Licence
under the Australian Corporations Act, is acting exclusively for BHP
Billiton as principal financial adviser in relation to the matters
described in this Announcement and will not be responsible to anyone
other than BHP Billiton for providing the protections afforded to the
clients of Gresham Partners nor for providing advice in relation to
matters described in this Announcement.
BNP Paribas, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of BNP Paribas or for providing advice in relation to
matters described in this Announcement.
Citi, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice and acting as
corporate broker to BHP Billiton in relation to the matters described in
this Announcement and is not advising any other person and accordingly
will not be responsible to any person other than BHP Billiton for
providing the protections afforded to the customers of Citi or for
providing advice in relation to matters described in this Announcement.
HSBC, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of HSBC or for providing advice in relation to matters
described in this Announcement.
Lazard, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is providing financial advice to BHP
Billiton in relation to the matters described in this Announcement and is
not advising any other person and accordingly will not be responsible to
any person other than BHP Billiton for providing the protections afforded
to the customers of Lazard or for providing advice in relation to matters
described in this Announcement.
Merrill Lynch International, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is providing
financial advice and acting as corporate broker to BHP Billiton in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the customers of Merrill Lynch International or for providing advice in
relation to matters described in this Announcement.
UBS Investment Bank is providing financial advice to BHP Billiton in
relation to the matters described in this Announcement and is not
advising any other person and accordingly will not be responsible to any
person other than BHP Billiton for providing the protections afforded to
the clients of UBS or for providing advice in relation to matters
described in this Announcement.
The banks participating in the committed bank financing facility of US$55
billion are as follows:
As Mandated Lead Arranger: Barclays Capital (the investment banking
division of Barclays Bank PLC); BNP Paribas; Citigroup Global Markets
Limited; Goldman Sachs International; HSBC Bank plc; Banco Santander,
S.A.; and UBS Limited.
As Underwriter: Barclays Bank PLC; BNP Paribas; Citibank N.A., London
Branch; Goldman Sachs Credit Partners L.P.; HSBC Bank plc; Banco
Santander,S.A.; and UBS AG, London Branch.
It is possible that this Announcement could or may contain forward-
looking statements that are based on current expectations or beliefs, as
well as assumptions about future events. Reliance should not be placed
on any such statements because of their very nature, they are subject to
known and unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and BHP Billiton`s plans and
objectives, to differ materially from those expressed or implied in the
forward-looking statements.
None of the statements concerning expected cost savings, volume-driven
benefits (and resulting incremental EBITDA) and earnings per share
accretion in this Announcement should be interpreted to mean that the
future earnings per share of the Enlarged Group for current or future
financial years will necessarily match or exceed the historical or
published earnings per share of BHP Billiton, and the actual cost savings
and volume-driven benefits (and resulting EBITDA enhancement) may be
materially greater or less than estimated.
There are several factors which could cause actual results to differ
materially from those expressed or implied in forward-looking statements.
Among the factors that could cause actual results to differ materially
from those described in the forward-looking statements are BHP Billiton`s
ability to successfully combine the businesses of BHP Billiton and Rio
Tinto and to realise expected synergies from that combination, changes in
the global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in tax
rates and future business combinations or dispositions.
BHP Billiton does not undertake any obligation (except as required by
law, the Listing Rules of ASX Limited or the rules of the UK Listing
Authority and the London Stock Exchange) to revise or update any forward-
looking statement contained in this Announcement, regardless of whether
those statements are affected as a result of new information, future
events or otherwise.
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if
any person is, or becomes, "interested" (directly or indirectly) in one
per cent or more of any class of "relevant securities" of any of BHP
Billiton Plc, BHP Billiton Limited, Rio Tinto plc or Rio Tinto Limited,
all "dealings" in any "relevant securities" of that company (including by
means of an option in respect of, or a derivative referenced to, any such
"relevant securities") must be publicly disclosed by no later than 3.30
pm (London time) on the London business day following the date of the
relevant transaction.
The relevant disclosure must include details of all "interests" or
"dealings" in any class of "relevant" securities of the other company
which is part of its DLC structure. Therefore, if, for example, a
disclosure is being made in respect of a dealing in securities of BHP
Billiton Plc, an accompanying disclosure must also be made of interests
or short positions held in securities of BHP Billiton Limited, even if
the person`s interest or short position is less than one per cent of the
relevant class. The same approach should be adopted in respect of
securities of Rio Tinto plc and Rio Tinto Limited. Therefore, each
disclosure should consist of two Rule 8.3 disclosure forms, one for the
Plc arm of the DLC structure and one for the Limited arm of the DLC
structure, released as one announcement.
This requirement will continue until the date on which the Offers become,
or are declared, unconditional as to acceptances, lapse or are otherwise
withdrawn or on which the "Offer Period" otherwise ends. If two or more
persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an "interest" in "relevant securities" of
BHP Billiton Plc, BHP Billiton Limited, Rio Tinto plc or Rio Tinto
Limited, they will be deemed to be a single person for the purpose of
Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of either BHP Billiton or Rio Tinto by BHP Billiton or Rio
Tinto, or by any of their respective "associates", must be disclosed by
no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such
securities in issue, can be found on the UK Panel`s website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long
economic exposure, whether conditional or absolute, to changes in the
price of securities. In particular, a person will be treated as having an
"interest" by virtue of the ownership or control of securities, or by
virtue of any option in respect of, or derivative referenced to,
securities.
Terms in quotation marks are defined in the Code, which can also be found
on the UK Panel`s website. If you are in any doubt as to whether or not
you are required to disclose a "dealing" under Rule 8, you should consult
the UK Panel.
APPENDIX I
PRE-CONDITIONS TO THE RIO TINTO PLC OFFER AND THE RIO TINTO LIMITED OFFER
The making of:
* the Rio Tinto plc Offer by the posting of the Rio Tinto plc Offer
Document and Rio Tinto plc Offer Form of Acceptance; and
* the Rio Tinto Limited Offer by the posting of the BHP Billiton Bidder`s
Statement and the Rio Tinto Limited Offer Form of Acceptance,
will take place following the satisfaction of, or to the extent permitted
by the UK Panel, waiver by BHP Billiton Limited of, the following Pre-
conditions:
European Union merger control
(A) insofar as the Acquisition constitutes a concentration with a
Community dimension within the scope of Council Regulation (EC) 139/2004
(as amended) (the "Merger Regulation"):
(i) one of the following having occurred:
(a) the European Commission having made a decision declaring the
concentration compatible with the common market under Article 6(1)(b),
8(1) or 8(2) of the Merger Regulation; or
(b) the European Commission not having taken a decision in accordance
with Article 6(1)(b), 6(1)(c), 8(1), 8(2) or 8(3) of the Merger
Regulation within the time limits set in Articles 10(1) and 10(3) and is
thereby deemed to have declared the concentration compatible with the
common market pursuant to the presumption in Article 10(6) of the Merger
Regulation; or
(c) if the European Commission shall have made a referral to one or more
competent authorities under Articles 4(4) or 9(1) of the Merger
Regulation in connection with part or all of the concentration:
1. such competent authorities having issued a decision, finding or
declaration approving the proposed acquisition and permitting its closing
without any breach of applicable law or of the Merger Regulation; and
2. the Pre-condition set out in sub-paragraphs (a) or (b) above having
been satisfied in respect of any part of the concentration retained to be
reviewed by the European Commission under the Merger Regulation;
and
(ii) if one or more competent authorities takes appropriate measures to
protect its legitimate interests pursuant to Article 21(4) of the Merger
Regulation, such measures not preventing completion of the proposed
acquisition without a breach of any applicable law or of the Merger
Regulation;
US merger control
(B) all filings having been made and all or any applicable waiting
periods (including any extensions thereof) under the United States Hart-
Scott Rodino Antitrust Improvements Act of 1976 and the regulations
thereunder having expired, lapsed or been terminated as appropriate in
each case in respect of the Acquisition and no member of the Rio Tinto
Group or the BHP Billiton Group being subject to threatened or actual
litigation, or to any order or injunction of a court of competent
jurisdiction in the United States that prohibits consummation of the
Acquisition as a result of action brought by the US Federal Trade
Commission or US Department of Justice;
Australian foreign investment approval
(C) one of the following having occurred:
(i) BHP Billiton having received written notice issued by or on behalf of
the Australian Treasurer stating that there are no objections under the
Australian Government`s foreign investment policy to a Relevant
Acquisition, such notice being unconditional; or
(ii) the period provided under the Australian FATA during which the
Australian Treasurer may make an order or interim order under the
Australian FATA prohibiting a Relevant Acquisition having expired,
without such an order having been made; or
(iii) if an interim order shall have been made to prohibit a Relevant
Acquisition, the subsequent period for making a final order having
elapsed without any such final order having been made;
Australian merger control
(D) either one of the following having occurred:
(i) BHP Billiton having received notice in writing from the ACCC to the
effect that the ACCC does not propose to intervene in or seek to prevent
the Acquisition pursuant to section 50 of the Australian Trade Practices
Act, such notice being unconditional; or
(ii) BHP Billiton having been granted clearance or authorisation for the
Acquisition by the ACCC or the Australian Competition Tribunal under Part
VII of the Australian Trade Practices Act (such clearance or
authorisation being unconditional), and no application for review of such
clearance or authorisation having been made within the period prescribed
by such Act;
Canadian merger control
(E) either one of the following having occurred:
(i) the Canadian Commissioner having issued an advance ruling certificate
under section 102(1) of the Canadian Competition Act in respect of the
Acquisition; or
(ii) any applicable waiting period under the Canadian Competition Act
having expired or been earlier terminated or waived by the Canadian
Commissioner, and BHP Billiton having been advised by the Canadian
Commissioner that she has determined that grounds do not exist for her to
make an application to the Canadian Competition Tribunal under section 92
of the Canadian Competition Act for an order in respect of the
Acquisition, such advice being unconditional; and
South African merger control
(F) the South African Competition Authorities having unconditionally
approved the Acquisition in terms of Chapter 3 of the South African
Competition Act.
BHP Billiton Limited shall be entitled to waive all and any of the above
Pre-conditions in whole or in part.
APPENDIX II
CONDITIONS AND FURTHER TERMS OF THE RIO TINTO PLC OFFER
1. Conditions to the Rio Tinto plc Offer
The Rio Tinto plc Offer, which will be made by BHP Billiton Limited will
comply with the rules and regulations of the Financial Services Authority
and the London Stock Exchange and the UK Code.
The Rio Tinto plc Offer will be subject to the fulfilment of the
following conditions:
Minimum acceptance condition
(A) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m (London time) on the first closing
date of the Rio Tinto plc Offer (or such later time(s) and/or date(s) as
BHP Billiton Limited may, with the consent of the UK Panel or in
accordance with the UK Code, decide) in respect of the Rio Tinto Plc
Shares which would result in BHP Billiton Limited and/or any other
members of the BHP Billiton Group holding Rio Tinto Plc Shares which
together amount to more than 50 per cent. In nominal value of the total
number of Rio Tinto Plc Shares, provided that this condition shall not be
satisfied unless BHP Billiton Limited and/or any members of the BHP
Billiton Group shall have acquired or agreed to acquire (whether pursuant
to the Rio Tinto plc Offer or otherwise) Rio Tinto Plc Shares carrying in
aggregate more than 50 per cent of the voting rights then normally
exercisable at general meetings of Rio Tinto plc. For the purposes of
this condition:
(i) shares which have been unconditionally allotted but not issued before
the Rio Tinto plc Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise, shall be deemed to carry
the voting rights they will carry on being entered into the register of
members of Rio Tinto plc; and
(ii) the expression "Rio Tinto plc Shares to which the Rio Tinto plc
Offer relates" shall be construed in accordance with sections 974 to 991
of the UK Companies Act 2006.
European Union merger control
(B) in the event that Pre-condition (A) is waived, insofar as the
Acquisition constitutes a concentration with a Community dimension within
the scope of the Merger Regulation;
(i) one of the following having occurred:
(a) the European Commission having made a decision declaring the
concentration compatible with the common market under Article 6(1)(b),
8(1) or 8(2) of the Merger Regulation (or having been deemed to have
declared the concentration compatible with the common market pursuant to
the presumption in Article 10(6) of the Merger Regulation); or
(b) the European Commission not having taken a decision in
accordance with Article 6(1)(b), 6(1)(c), 8(1), 8(2) or 8(3) of the
Merger Regulation within the time limits set in Articles 10(1) and 10(3)
and is thereby deemed to have declared the concentration compatible with
the common market pursuant to the presumption in Article 10(6) of the
Merger Regulation; or
(c) if the European Commission shall have made a referral to one or
more competent authorities under Articles 4(4) or 9(1) of the Merger
Regulation in connection with part or all of the concentration:
1. such competent authorities having issued a decision, finding or
declaration approving the proposed acquisition and permitting its closing
without any breach of applicable law or of the Merger Regulation; and
2. the condition set out in sub-paragraphs (a) or (b) above having been
satisfied in respect of any part of the concentration retained to be
reviewed by the European Commission under the Merger Regulation;
and
(ii) if one or more competent authorities takes appropriate measures to
protect its legitimate interests pursuant to Article 21(4) of the Merger
Regulation, such measures not preventing completion of the proposed
acquisition without a breach of any applicable law or of the Merger
Regulation;
US merger control
(C) in the event that Pre-condition (B) is waived, all filings having
been made and all or any applicable waiting periods (including any
extensions thereof) under the United States Hart-Scott Rodino Antitrust
Improvements Act of 1976 and the regulations thereunder having expired,
lapsed or been terminated as appropriate in each case in respect of the
Acquisition and no member of the Rio Tinto Group or the BHP Billiton
Group being subject to threatened or actual litigation, or to any order
or injunction of a court of competent jurisdiction in the United Sates
that prohibits consummation of the Acquisition as a result of action
brought by the US Federal Trade Commission or US Department of Justice;
Australian foreign investment approval
(D) in the event that Pre-condition (C) is waived, one of the following
having occurred:
(i) BHP Billiton having received written notice issued by or on behalf of
the Australian Treasurer stating that there are no objections under the
Australian Government`s foreign investment policy to a Relevant
Acquisition, such notice being unconditional; or
(ii) the period provided under the Australian FATA during which the
Australian Treasurer may make an order or interim order under the
Australian FATA prohibiting a Relevant Acquisition having expired without
such an order having been made; or
(iii) if an interim order shall have been made to prohibit a Relevant
Acquisition, the subsequent period for making a final order having
elapsed without any such final order having been made;
Australian merger control
(E) in the event that Pre-condition (D) is waived, either one of the
following having occurred:
(i) BHP Billiton having received notice in writing from the ACCC to the
effect that the ACCC does not propose to intervene in or seek to prevent
the Acquisition pursuant to section 50 of the Australian Trade Practices
Act, such notice being unconditional; or
(ii) BHP Billiton having been granted clearance or authorisation for the
Acquisition by the ACCC or the Australian Competition Tribunal under Part
VII of the Australian Trade Practices Act (such clearance or
authorisation being unconditional), and no application for review of such
clearance or authorisation having been made within the period prescribed
by such Act;
Canadian merger control
(F) in the event that Pre-condition (E) is waived, either one of the
following having occurred:
(i) the Canadian Commissioner having issued an advance ruling certificate
under section 102(1) of the Canadian Competition Act in respect of the
Acquisition; or
(ii) any applicable waiting period under the Canadian Competition Act
having expired or been earlier terminated or waived by the Canadian
Commissioner, and BHP Billiton having been advised by the Canadian
Commissioner that she has determined that grounds do not exist for her to
make an application to the Canadian Competition Tribunal under section 92
of the Canadian Competition Act for an order in respect of the
Acquisition, such advice being unconditional;
South African merger control
(G) in the event that Pre-condition (F) is waived, the South African
Competition Authorities having unconditionally approved the Acquisition
in terms of Chapter 3 of the South African Competition Act;
Approvals by Public Authorities
(H) BHP Billiton having received all Approvals (other than those referred
to in paragraphs (B) to (G) above, inclusive) which are required by law
or by any Public Authority:
(i) to permit the Rio Tinto plc Offer and the Rio Tinto Limited Offer to
be made and to be accepted by Rio Tinto plc Shareholders and Rio Tinto
Limited Shareholders, respectively; or
(ii) as a result of the Acquisition and which are necessary for the
continued operation or ownership of the business or any part of the
business of any member of the Rio Tinto Group,
and, in each case, those Approvals shall have been on an unconditional
basis and remain in force in all respects and there has been no notice,
intimation or indication of intention to revoke, suspend, restrict,
modify or not renew those Approvals;
No action adversely affecting the Acquisition
(l) during the Relevant Period:
(i) there having not been any preliminary or final decision, order or
decree issued by any Public Authority;
(ii) no action, investigation or examination or any other step having
been taken, instituted, or threatened by any Public Authority;
(iii) no application having been made to any Public Authority (other than
an application by BHP Billiton Limited or any company within the BHP
Billiton Group);
which:
(iv) restrains, prohibits or impedes, or threatens to restrain, prohibit
or impede, or may otherwise materially adversely impact upon:
(a) the Acquisition (including the making of the Rio Tinto plc Offer or
the Rio Tinto Limited Offer or the acquisition by BHP Billiton of any
other securities in Rio Tinto plc or Rio Tinto Limited or any other
member of the Rio Tinto Group); or
(b) the rights of BHP Billiton Limited in respect of any Rio Tinto plc
Shares or Rio Tinto Limited Shares to be acquired under the Rio Tinto plc
Offer or the Rio Tinto Limited Offer or otherwise or any other securities
in any member of the Rio Tinto Group; or
(v) in consequence of, or in connection with, the Acquisition, seeks to
require the divestiture by BHP Billiton Limited of any Rio Tinto plc
Shares or Rio Tinto Limited Shares, or the divestiture of any assets
(including the variation or termination of any contractual rights) by any
member of the Rio Tinto Group or by any member of the BHP Billiton Group;
(vi) in consequence of, or in connection with, the Acquisition, imposes
any limitation on the ability of any member of the BHP Billiton Group or
the Rio Tinto Group to conduct their respective businesses (or any of
them) or to own any of their respective assets or properties or any part
thereof being a limitation that (individually or together with others)
has or could reasonably be expected to have a materially adverse effect
on the assets, liabilities, financial or trading position, profitability,
production or prospects of any member of the BHP Billiton Group or any
member of the Rio Tinto Group; or
(vii) in consequence of, or in connection with, the Acquisition, requires
any member of the BHP Billiton Group to acquire or offer to acquire any
shares or other securities (or the equivalent) or interest in any body
corporate or other entity, other than Rio Tinto plc or Rio Tinto Limited
and during the Relevant Period, all applicable waiting and other time
periods during which any Public Authority could institute, implement or
threaten any action, proceeding, suit, investigation, examination,
enquiry or reference or any other step under the laws of any jurisdiction
in respect of the Rio Tinto plc Offer or Rio Tinto Limited Offer or the
acquisition or proposed acquisition of any Rio Tinto plc Shares or Rio
Tinto Limited Shares having expired, lapsed or terminated;
(J) during the Relevant Period no law having been enacted, made,
proclaimed or decreed, or having been proposed to be enacted, made,
proclaimed or decreed, which:
(i) restrains, prohibits or impedes, or threatens to restrain, prohibit
or impede, or may otherwise materially adversely impact upon:
(a) the Acquisition (including the making of the Rio Tinto plc Offer or
the Rio Tinto Limited Offer or the acquisition by BHP Billiton Limited of
any other securities in Rio Tinto plc or Rio Tinto Limited or any other
member of the Rio Tinto Group); or
(b) the rights of BHP Billiton Limited in respect of any Rio Tinto plc
Shares or Rio Tinto Limited Shares to be acquired under the Rio Tinto plc
Offer or the Rio Tinto Limited Offer or otherwise or any other securities
in any member of the Rio Tinto Group; or
(ii) seeks to require the divestiture by BHP Billiton Limited of any Rio
Tinto plc Shares or Rio Tinto Limited Shares, or the divestiture of any
assets by (including the variation or termination of any contractual
rights of) any member of the Rio Tinto Group or by any member of the BHP
Billiton Group; or
(iii) imposes any limitation on the ability of any member of the BHP
Billiton Group or the Rio Tinto Group to conduct their respective
businesses (or any of them) or to own any of their respective assets or
properties or any part thereof being a limitation that (individually or
together with others) has or could reasonably be expected to have a
materially adverse effect on the assets, liabilities, financial or
trading position, profitability, production or prospects of any member of
the BHP Billiton Group or any member of the Rio Tinto Group; or
(iv) requires any member of the BHP Billiton Group to acquire or offer to
acquire any shares or other securities (or the equivalent) or interest in
any body corporate or other entity other than Rio Tinto plc or Rio Tinto
Limited;
or would do so (in respect of any or all of the foregoing) if enacted,
made, proclaimed or decreed as proposed;
BHP Billiton shareholder approval
(K) the BHP Billiton Shareholder Resolutions having been passed at the
BHP Billiton EGMs (or at any adjournment thereof);
Quotation of New BHP Billiton Plc Shares, new BHP Billiton Plc ADRs, New
BHP Billiton Limited Shares and new BHP Billiton Limited ADRs
(L) the admission to the UK Official List of the New BHP Billiton Plc
Shares to be issued in connection with the Rio Tinto plc Offer having
become effective in accordance with the UK Listing Rules and the
admission of such shares to trading having become effective in accordance
with the Admission and Disclosure Standards of the London Stock Exchange
or if BHP Billiton and Rio Tinto plc so determine and subject to the
consent of the UK Panel, the UKLA having agreed to admit such shares to
the UK Official List and the London Stock Exchange having agreed to admit
such shares to trading subject only to (i) the allotment of such shares
and/or (ii) the Rio Tinto plc Offer having become or having been declared
unconditional in all respects;
(M) permission for the admission to quotation of the New BHP Billiton
Limited Shares to be issued in connection with the Rio Tinto plc Offer
having been granted by ASX, subject only to:
(i) the allotment and issue of such shares; and
(ii) the provision of the following information to ASX:
(a) the date of allotment and number of shares for which quotation is
sought;
(b) confirmation that the shares have been allocated into the issuer
sponsored sub register;
(c) a statement setting out the issued capital of BHP Billiton Limited
following allotment; and
(d) a statement setting out the names of the 20 largest holders of BHP
Billiton Limited Shares and the percentage held by each;
(N) confirmation having been received by BHP Billiton that the new BHP
Billiton Plc ADRs representing the New BHP Billiton Plc Shares and the
new BHP Billiton Limited ADRs representing the New BHP Billiton Limited
Shares being offered in the US Offer have been approved for listing,
subject to official notice of issuance, on the New York Stock Exchange,
and, absent an available exemption from the registration requirements of
the Securities Act, the registration statement for the New BHP Billiton
Plc Shares, the new BHP Billiton Plc ADRs, the New BHP Billiton Limited
Shares and the new BHP Billiton Limited ADRs to be issued pursuant to the
US Offer having become effective under the Securities Act, and no stop
order suspending the effectiveness of the registration statement having
been issued nor proceedings for that purpose having been initiated or
threatened by the SEC and BHP Billiton Plc having received all necessary
US state securities law or blue sky authorizations;
Inter-conditionality of Rio Tinto plc Offer and Rio Tinto Limited Offer
(O) the Rio Tinto Limited Offer having become or having been declared
free of all Rio Tinto Limited Offer Conditions (other than the Rio Tinto
plc Offer Defeating Condition);
Non-existence of certain rights
(P) no person (other than a member of the BHP Billiton Group) having or
will have any right (whether subject to conditions or not) under any
Material Rio Tinto Agreement, in consequence of BHP Billiton Limited
acquiring securities in Rio Tinto plc or Rio Tinto Limited or a change in
the control or management of Rio Tinto plc or Rio Tinto Limited or
otherwise, to:
(i) acquire from any member of the Rio Tinto Group, or to require the
disposal by any member of the Rio Tinto Group of, or to require any
member of the Rio Tinto Group to offer to dispose of, any Material Rio
Tinto Asset;
(ii) terminate, or to vary the terms or performance of, or to vary the
rights, obligations and liabilities of any member of the Rio Tinto Group
under, any Material Rio Tinto Agreement;
(iii) require repayment of any moneys borrowed by or any other
indebtedness (actual or contingent) of any member or members of the Rio
Tinto Group immediately or earlier than their or its stated maturity date
or repayment date for a material amount in aggregate or withdraw or
inhibit the ability of any member to borrow moneys or incur indebtedness;
(iv) enforce, claim, create or vary any mortgage, charge or other
security interest over any Material Rio Tinto Asset,
other than a right for which a written, enforceable, irrevocable and
unconditional waiver or release has been obtained from the person by Rio
Tinto plc and Rio Tinto Limited before the end of the Relevant Period,
and which waiver or release has been publicly disclosed;
No material transactions, claims or changes in the conduct of the
business of the Rio Tinto Group
(Q) save as disclosed in any public announcement by Rio Tinto plc or Rio
Tinto Limited in each case delivered to a Regulatory Information Service
or to the ASX ("Publicly Disclosed") prior to the Announcement Date, no
member of the Rio Tinto Group having during the Relevant Period:
(i) acquired, offered to acquire or agreed to acquire one or more shares,
companies or assets (or an interest in one or more shares, companies or
assets) for an amount in aggregate that is material;
(ii) disposed (including by grant of a mortgage, charge, encumbrance or
other security interest), offered to dispose or agreed to dispose of:
(a) one or more shares, companies or assets (or an interest in one or
more shares, companies or assets) for an amount or having a market value
in aggregate that is material;
(b) one or more Iron Ore Assets (or an interest in one or more Iron Ore
Assets) for an amount or having a market value in aggregate that is
material in the context of the Iron Ore Business;
For the avoidance of doubt
(c) a disposal of, an offer to dispose of or an agreement to dispose of
one or more shares or interests in a company or entity which owns
(directly or indirectly) an interest in an Iron Ore Asset is taken to be
a disposal of, an offer to dispose of or an agreement to dispose of (as
the case may be) an interest in that Iron Ore Asset; and
(d) a reference to assets in subparagraph (a) above includes (without
limitation) Iron Ore Assets;
(iii) entered into or offered to enter into any joint venture, asset or
profit sharing, partnership, merger of businesses (including through a
multiple listed companies structure) or of corporate entities:
(a) in respect of any Iron Ore Assets having a market value in aggregate
that is material in the context of the Iron Ore Business; or
(b) otherwise involving a material commitment in aggregate;
(iv) other than in the ordinary course of business, incurred, committed
to or brought forward the time for incurring or committing, or granted to
another person a right the exercise of which would involve a member of
the Rio Tinto Group incurring or committing to, any capital expenditure
or liability, or forgone any revenue, for one or more related items or
amounts that are material in aggregate;
(v) issued or agreed to issue, authorised or proposed the issue of, any
equity, debt or hybrid security (including any security convertible into
shares of any class) or rights, warrants or options to subscribe for or
acquire any such securities, other than Rio Tinto plc Shares or Rio Tinto
Limited Shares issued as a result of exercise or conversion of any
options or rights issued or granted pursuant to a Rio Tinto plc Share
Scheme or Rio Tinto Limited Share Scheme provided that the issue or grant
of the options or rights was made and publicly disclosed before the
Announcement Date;
(vi) recommended, declared, paid or made, or resolved to recommend,
declare, pay or make any bonus, dividend or other distribution whether
payable in cash, in specie or otherwise except for half-year and full-
year dividends payable in cash at a level which is not materially
different to the past practice of the relevant member of the Rio Tinto
Group;
(vii) made or authorised or proposed or announced an intention to propose
any change in its loan capital for a material amount in aggregate;
(viii) issued or agreed to issue any debentures or save in the ordinary
course of business incurred or increased any indebtedness or become
subject to any contingent liability for a material amount in aggregate;
(ix) purchased, bought-back, cancelled, redeemed or repaid any of its own
shares or other securities or the shares or securities of any other
member of the Rio Tinto Group, or otherwise reduced its share capital in
any way, or consolidated or subdivided all or any part of its share
capital or otherwise converted any or all of its shares into a larger or
smaller number, or otherwise made any other change to, or reconstruction
of, any part of its share capital (other than as a consequence of an
issue of Rio Tinto plc Shares or Rio Tinto Limited Shares upon the
exercise or conversion of any options or rights issued or granted
pursuant to a Rio Tinto plc Share Scheme or Rio Tinto Limited Share
Scheme provided that the issue or grant of the options or rights was made
and Publicly Disclosed before the Announcement Date);
(x) implemented or entered into any scheme or arrangement or compromise
(including one for a reconstruction or amalgamation of any members of the
Rio Tinto Group), or a deed of company arrangement, or any analogous
procedure, scheme or arrangement in any jurisdiction;
(xi) entered into, renewed or changed the terms of any contract of
service with, any director or senior executive of Rio Tinto plc or Rio
Tinto Limited or another material member of the Rio Tinto Group;
(xii) taken any corporate action or had any legal proceedings started or
threatened against it in any jurisdiction and no order or determination
having been made by a Public Authority:
(a) for its winding-up, dissolution or reorganisation; or
(b) for the appointment of a receiver, receiver and manager,
administrative receiver, administrator, trustee or similar officer in
respect of all or any of its assets or revenues; or
(c) for the appointment of an administrator, liquidator or provisional
liquidator,
(or any analogous proceedings in any jurisdiction), and no such
person having been appointed during the Relevant Period;
(xiii) had any claim made or threatened against it, or litigation,
arbitration proceedings, prosecution or other legal proceedings commenced
against it, involving a claim of a material amount;
(xiv) other than in the ordinary course of business, entered into any
contract, transaction or arrangement which would be restrictive on the
business of any member of the Rio Tinto Group or, if the Acquisition is
completed, the Enlarged Group, where such restriction having had or could
reasonably be expected to have a materially adverse effect on the assets,
liabilities, financial or trading position, profitability, production or
prospects of any member of the Rio Tinto Group or, if the Acquisition is
completed, any member of the Enlarged Group;
(xv) waived or compromised any claim for a material amount (or for
amounts which in aggregate are material);
(xvi) made any changes in its Constitution or passed any special
resolution;
(xvii) varied or terminated any of the Rio Tinto DLC Agreements;
(xviii) borrowed or agreed to borrow any money (except for temporary
borrowing from its bankers in the ordinary course of business) for a
material amount (or for amounts which in aggregate are material);
(xix) released, discharged or modified any substantial obligation to it
of any person, firm or corporation (or agreed to do so) and such release,
discharge or modification having had or could reasonably be expected to
have a materially adverse effect on the assets, liabilities, financial or
trading position, profitability, production or prospects of any member of
the Rio Tinto Group;
(xx) done anything that (individually or together with any other things
done by the member or any other member of the Rio Tinto Group) having had
or could reasonably be expected to have a materially adverse effect on
the assets, liabilities, financial or trading position, profitability,
production or prospects of any member of the Rio Tinto Group;
(xxi) publicly disclosed the existence of any matter described in sub-
paragraphs (i) to above of this condition (Q); or
(xxii) entered into any contract, commitment, arrangement or agreement or
passed any resolution or made any offer (which remains open for
acceptance) with respect to, or publicly announced an intention to, or
proposal to, do anything described in sub-paragraphs (i) to (xx) above of
this condition (Q);
No material adverse change
(R) during the Relevant Period:
(i) there having been no occurrence, event or matter, including (without
limitation):
(a) any change in the status or terms of arrangements entered into with
any member of the Rio Tinto Group, any change in the status or terms of
any Approvals which are applicable to any member of the Rio Tinto Group
or any steps having been taken which are likely to result in a change in
the status or terms of any Approvals which are applicable to any member
of the Rio Tinto Group (whether or not wholly or partly attributable to
the making of the Rio Tinto plc Offer or the Rio Tinto Limited Offer or
the acquisition of any shares in Rio Tinto plc or Rio Tinto Limited);
(b) any failure by any past or present member of the Rio Tinto Group to
comply with any law or regulation of any jurisdiction with regard to the
disposal, spillage, release, discharge, leak or emission of any waste or
hazardous substance or any substance likely to impair the environment or
harm human health or animal health or otherwise relating to environmental
matters or otherwise any such disposal, spillage, release, discharge,
leak or emission (whether or not the same constituted a non-compliance by
any person with any such law or regulation, and wherever the same may
have taken place); or
(c) any past or present member of the Rio Tinto Group having become
liable (whether actually or contingently) to make good, repair, reinstate
or clean up any property or any controlled waters now or previously
owned, occupied, operated or made use of or controlled by any such past
or present member of the Rio Tinto Group;
(d) any litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Rio Tinto Group is or may become a
party (whether as a plaintiff, defendant or otherwise), or any
investigation by any Public Authority against or in respect or any member
of the Rio Tinto Group, having been instituted, announced or threatened
by or against or remaining outstanding in respect of any member of the
Rio Tinto Group;
(e) any contingent or other liability having arisen;
(f) any liability for duty or tax;
(g) any change in law (whether retrospective or not),
that (individually or together with others) has had or could reasonably
be expected to have a materially adverse effect on the assets,
liabilities, financial or trading position, profitability, production or
prospects of the Rio Tinto Group taken as a whole; and
(ii) no occurrence, event or matter, as described in sub-paragraph (i)
above of this condition r, which occurred before the Announcement Date
but was not apparent from publicly available information before then,
having become public;
(S) during the Relevant Period, BHP Billiton Limited not having
discovered that any document filed by or on behalf of any member of the
Rio Tinto Group with any Public Authority or ASIC prior to the
Announcement Date contains a material inaccuracy or is misleading
(whether by omission or otherwise) in a material respect;
Withdrawals
(T) if after the Rio Tinto plc Offer shall have become or have been
declared unconditional as to acceptances Rio Tinto plc Shareholders who
have accepted the Rio Tinto plc Offer having become entitled to withdraw
their acceptances pursuant to Section 87Q of the Financial Services and
Markets Act 2000 (UK) Rio Tinto plc Shareholders not having withdrawn
their acceptances in respect of such number of Rio Tinto plc Shares so
that the Rio Tinto plc Shares acquired or agreed to be acquired by BHP
Billiton Limited or any of its wholly-owned subsidiaries, either pursuant
to the Rio Tinto plc Offer or otherwise, will result in BHP Billiton
Limited and any of its wholly-owned subsidiaries holding Rio Tinto plc
Shares which together carry 50 per cent. Or less of the voting rights
then normally exercisable at general meetings of Rio Tinto plc; and
BHP Billiton Limited reserves the right to waive, in whole or in part,
all or any of the above conditions, except conditions (A) and (K). BHP
Billiton Limited may waive conditions (L) and (M) only with the prior
approval of the UK Panel.
Condition (K) must be fulfilled by, and conditions (B) to (J) (inclusive)
and (L) to (T) (inclusive) fulfilled or waived by midnight (London time)
on the 21st day after the later of the first closing date of the Rio
Tinto plc Offer and the date on which condition (A) is fulfilled (or in
each such case such later date as BHP Billiton Limited may, with the
consent of the UK Panel, decide). BHP Billiton Limited shall be under no
obligation to waive or treat as satisfied any of the conditions (B) to
(J) (inclusive) and (L) to (T) (inclusive) by a date earlier than the
latest date specified above for the satisfaction thereof, notwithstanding
that the other conditions of the Rio Tinto plc Offer may at such earlier
date have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any of such conditions may not be
capable of fulfilment. If BHP Billiton Limited is required by the UK
Panel to make an offer for Rio Tinto plc Shares under the provisions of
Rule 9 of the UK Code, BHP Billiton Limited may make such alterations to
any of the above conditions as are necessary to comply with the
provisions of that Rule.
In the event that Pre-Condition (A) is waived, if the Acquisition
constitutes a concentration with a community dimension within the scope
of the Merger Regulation and the European Commission initiates
proceedings under Article 6(1)(c) or following a referral by the European
Commission under Article 9(1) to a competent authority in the United
Kingdom there is a subsequent reference to the Competition Commission
before, in each case, 3.00 p.m. (London time) on the first closing date
of the Rio Tinto plc Offer or the date and time on which the Rio Tinto
plc Offer becomes unconditional (whichever is the later), the Rio Tinto
plc Offer will lapse. If the Rio Tinto plc Offer lapses, the Rio Tinto
plc Offer will cease to be capable of further acceptance and BHP Billiton
Limited and accepting Rio Tinto plc Shareholders will cease to be bound
by acceptances submitted at or before the time when the Rio Tinto plc
Offer so lapses.
The Rio Tinto plc Offer will be governed by English law and be subject to
the jurisdiction of the English courts, to the conditions set out above
and in the formal Rio Tinto plc Offer Document and related Form of
Acceptance.
2. Certain further terms of the Rio Tinto plc Offer
Fractions of New BHP Billiton Limited Shares or Interim Shares will not
be allotted or issued to persons accepting the Rio Tinto plc Offer.
Fractional entitlements will be rounded up or down to the nearest whole
number (with entitlements to 0.5 of a New BHP Billiton Limited Share or
of an Interim Share being rounded up).
The Rio Tinto plc Offer will not be made, directly or indirectly, in or
into, or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex, telephone
or e-mail) of interstate or foreign commerce of, or of any facility of a
national securities exchange of, Japan or any other jurisdiction where to
do so would constitute a violation of the laws of that jurisdiction and
the Rio Tinto plc Offer will not be capable of acceptance by any such
use, means, instrumentality or facility or from within any such
jurisdiction.
BHP Billiton Limited reserves the right to deem a shareholder resident in
such a jurisdiction to have elected for a particular form of
consideration, or to have made no election at all, or to offer such
shareholder cash only by way of consideration, in each case in connection
with the Rio Tinto plc Offer or any compulsory acquisition procedures.
BHP Billiton Limited further reserves the right to meet the cash
consideration due to such shareholders either from its own reserves or by
arranging, as it thinks fit, the sale or allotment of the shares to which
such shareholders would otherwise be entitled and then remitting the cash
proceeds of such sale or allotment, net of expenses, to such shareholders
instead.
The New BHP Billiton Plc Shares will be issued credited as fully paid and
will rank pari passu in all respects with the existing BHP Billiton Plc
Shares, save that BHP Billiton Limited reserves the right to withhold any
dividend not yet paid for the half year ending 31 December 2008 or any
subsequent period if Rio Tinto plc Shareholders would otherwise receive a
Rio Tinto dividend and a BHP Billiton dividend for the same period or a
substantial part of that period. Applications will be made to the UKLA
for the New BHP Billiton Plc Shares to be admitted to the Official List
and to the London Stock Exchange for the New BHP Billiton Plc Shares to
be admitted to trading.
In addition, application will be made to the New York Stock Exchange for
listing of the new BHP Billiton Limited ADRs (representing New BHP
Billiton Limited Shares) and the new BHP Billiton Plc ADRs (representing
the New BHP Billiton Plc Shares) being offered in the US Offer.
Application will be made for New BHP Billiton Limited Shares to be
admitted to quotation on ASX. It is expected that admission will become
effective upon issue and allotment of the New BHP Billiton Limited Shares
to accepting Rio Tinto shareholders and provision of standard information
to ASX, and that such New BHP Billiton Limited Shares may be traded on
ASX as from that time. The New BHP Billiton Limited Shares will, when
issued, be fully paid and rank pari passu in all respects with existing
BHP Billiton Limited Shares, including, where the record date for
determining entitlements is on or after the date of issue of New BHP
Billiton Limited Shares, the right to all dividends and other
distributions (if any) declared, made or paid by BHP Billiton Limited
save that BHP Billiton reserves the right to withhold any dividend not
yet paid for the half year ending 31 December 2008 or any subsequent
period if Rio Tinto shareholders would otherwise receive a Rio Tinto
dividend and a BHP Billiton dividend for the same period or a substantial
part of that period.
The Rio Tinto plc Shares which will be acquired under the Rio Tinto plc
Offer will be acquired fully paid and free from all liens, equities,
charges, encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all rights now
or hereafter attaching or accruing to them, including voting rights and
the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of
this Announcement other than the following dividends if paid or payable
in cash:
* 2007 final dividend (being the final dividend for the year ended 31
December 2007) at a level which does not exceed US$ 0.832 per share;
* 2008 interim dividend (being the interim dividend for the six month
period ending 30 June 2008) at a level which does not exceed US$ 0.676
per share; and
* 2008 final dividend (being the final dividend for the year ended 31
December 2008) at a level which does not exceed US$ 0.946 per share.
No BHP Billiton securities will be issued pursuant to the US Offer
component of the Rio Tinto plc Offer unless and until the Registration
Statement on Form F-4, which BHP Billiton plans to file with the SEC in
respect of such US Offer, is declared effective by the SEC.
APPENDIX III
CONDITIONS AND FURTHER ITEMS OF THE RIO TINTO LIMITED OFFER
Conditions to the Rio Tinto Limited Offer
The Rio Tinto Limited Offer, which will be made by BHP Billiton Limited,
will be made in accordance with Chapter 6 of the Australian Corporations
Act (as it applies to BHP Billiton).
The Rio Tinto Limited Offer Conditions are identical to the Rio Tinto plc
Offer Conditions set out in Appendix II except that conditions (L), (N)
and (T) are omitted (not being conditions to the Rio Tinto Limited Offer)
and conditions (A), (M) and (O) are replaced with the following:
Minimum acceptance condition
(A) at the time the Rio Tinto Limited Offer has become free of
conditions (other than this condition (A)), either as a result of the
conditions being satisfied or the Rio Tinto Limited Offer being declared
free of the conditions, BHP Billiton Limited having a relevant interest
in more than 50 per cent of the Publicly-held Rio Tinto Limited Shares on
issue;
Quotation of New BHP Billiton Limited Shares
(M) permission for the admission to quotation of the New BHP Billiton
Limited Shares to be issued in connection with the Rio Tinto Limited
Offer having be granted by ASX, subject only to:
(i) the allotment and issue of such shares; and
(ii) the provision of the following information to ASX:
(a) the date of allotment and number of shares for which quotation
is sought;
(b) confirmation that the shares have been allocated into the
issuer sponsored sub register;
a statement setting out the issued capital of BHP Billiton
Limited following allotment; and
(d) a statement setting out the names of the 20 largest holders of
BHP Billiton Limited Shares and the percentage held by each;
Inter-conditionality of Rio Tinto plc Offer and Rio Tinto Limited Offer
the Rio Tinto plc Offer having become or having been declared free of all
Rio Tinto plc Offer Conditions (other than the Rio Tinto Limited Offer
Defeating Condition);
Offers will be made under the Rio Tinto Limited Offer subject to
fulfilment of the Rio Tinto Limited Offer Conditions (if the Pre-
conditions are satisfied or waived) to each holder of Rio Tinto Limited
Shares on the Rio Tinto Limited Register Date, and may be extended in BHP
Billiton Limited`s discretion to any person who becomes registered, or
entitled to be registered as the holder of Rio Tinto Limited Shares from
the Rio Tinto Limited Register Date to the end of the Offer Period due to
conversion of, or exercise of rights attaching to, securities that exist
on the Register Date and (i) will convert, or may be converted, to Rio
Tinto Limited Shares or (ii) confer rights to be issued Rio Tinto Limited
Shares. Transferees of Rio Tinto Limited Shares will be entitled to
accept offers as provided under section 653B of the Australian
Corporations Act.
All Rio Tinto Limited Offer Conditions other than Rio Tinto Limited Offer
Condition (D) will operate as defeating conditions. Rio Tinto Limited
Offer Condition (D) will be a condition precedent to provisions of
contracts resulting from acceptance of offers under the Rio Tinto Limited
Offer which relate to BHP Billiton acquiring an interest in Rio Tinto
Limited Shares becoming binding. Any breach or non-fulfilment of a Rio
Tinto Limited Offer Condition may be relied upon only by BHP Billiton
Limited which may waive (generally or in respect of a particular event)
the breach or non-fulfilment of that condition.
BHP Billiton Limited will not declare the Rio Tinto Limited Offer free of
condition (O) unless it has been satisfied.
Under section 625 of the Australian Corporations Act, the Rio Tinto
Limited Offer is also subject to a non-waivable condition (subject to any
modification by ASIC) that an application for admission of the New BHP
Billiton Limited Shares to quotation on ASX be made within 7 days after
the date on which the BHP Billiton Bidder`s Statement is served on Rio
Tinto Limited and that permission for admission to quotation of those
shares on ASX be granted no later than 7 days after the end of the Rio
Tinto Limited Offer Period.
In accordance with the Australian Corporations Act, BHP Billiton Limited
will be entitled to declare the Rio Tinto Limited Offer free of any of
the Rio Tinto Limited Offer Conditions not less than 7 days before the
last day of the Rio Tinto Limited Offer Period. However, BHP Billiton
Limited will not declare the offers free of Rio Tinto Limited Offer
Condition (D) if to do so would result in a contravention of the
Australian FATA.
The offers to be made pursuant to Rio Tinto Limited Offer will be
governed by the law in force in the State of Victoria, Australia.
Certain further terms of the Rio Tinto Limited Offer
Fractions of New BHP Billiton Limited Shares will not be allotted or
issued to persons accepting the Offer. Fractional entitlements will be
rounded up or down to the nearest whole number (with entitlements to 0.5
of a New BHP Billiton Limited Share being rounded up).
The Rio Tinto Limited Offer will not be registered in any jurisdiction
outside Australia (unless an applicable foreign law treats it as
registered as a result of the BHP Billiton Bidder`s Statement being
lodged with ASIC). Any shareholder who wishes to accept the Rio Tinto
Limited Offer must first satisfy itself that such acceptance is permitted
by any foreign law applicable to that shareholder. If any authority or
clearance under Australian law is required to enable a shareholder in Rio
Tinto Limited to receive any consideration under the Rio Tinto Limited
Offer, any acceptance of the Rio Tinto Limited Offer will not create any
right to receive that consideration unless and until all requisite
authorities or clearances have been received. The Rio Tinto Limited
Offer may provide that securities which would otherwise be issued to an
accepting shareholder resident in a jurisdiction outside Australia may be
vested in a nominee and sold, with the net proceeds of sale remitted to
the accepting shareholder.
The New BHP Billiton Limited Shares to be issued pursuant to the Rio
Tinto Limited Offer have not been and will not be registered under any of
the relevant securities laws of Japan. Accordingly, the New BHP Billiton
Limited Shares may not be offered, sold or delivered, directly or
indirectly, in Japan, except pursuant to exemptions from applicable
requirements of such jurisdiction.
Application will be made for New BHP Billiton Limited Shares to be
admitted to quotation on ASX. It is expected that admission will become
effective upon issue and allotment of the New BHP Billiton Limited Shares
to accepting Rio Tinto shareholders and provision of standard information
to ASX, and that such New BHP Billiton Limited Shares may be traded on
ASX as from that time. The New BHP Billiton Limited Shares will, when
issued, be fully paid and rank pari passu in all respects with existing
BHP Billiton Limited Shares, including, where the record date for
determining entitlements is on or after the date of issue of New BHP
Billiton Limited Shares, the right to all dividends and other
distributions (if any) declared, made or paid by BHP Billiton Limited
save that BHP Billiton reserves the right to withhold any dividend not
yet paid for the half year ending 31 December 2008 or any subsequent
period if Rio Tinto shareholders would otherwise receive a Rio Tinto
dividend and a BHP Billiton dividend for the same period or a substantial
part of that period.
Rio Tinto Limited Shares which will be acquired under the Rio Tinto
Limited Offer will be acquired fully paid and free from all liens,
equities, charges, encumbrances, options, rights of pre-emption and any
other third party rights and interests of any nature and together with
all rights now or hereafter attaching or accruing to them, including
voting rights and the right to receive and retain in full all dividends
and other distributions (if any) declared, made or paid on or after the
Announcement Date other than the following dividends if paid or payable
in cash:
* 2007 final dividend (being the final dividend for the year ended 31
December 2007) at a level which does not exceed US$ 0.832 per share;
* 2008 interim dividend (being the interim dividend for the six month
period ending 30 June 2008) at a level which does not exceed US$ 0.676
per share; and
* 2008 final dividend (being the final dividend for the year ended 31
December 2008) at a level which does not exceed US$ 0.946 per share.
APPENDIX IV
BASES AND SOURCES OF INFORMATION
(a) Unless otherwise stated, financial and other information concerning
BHP Billiton and Rio Tinto has been extracted or derived from the interim
statements, preliminary results and the annual report and accounts of
each company for the relevant periods, or from published sources or from
BHP Billiton management sources.
(b) Unless otherwise stated, average share prices and market
capitalisations throughout this Announcement reflect volume-weighted
averages.
(c) The market value of BHP Billiton Limited Shares is based on the
closing price of a BHP Billiton Limited Share of A$46.10, provided by the
ASX on 31 October 2007, being the last date prior to BHP Billiton`s
approach to Rio Tinto.
(d) The market value of BHP Billiton Plc Shares is based on the closing
middle-market price of a BHP Billiton Plc Share of ?18.31, provided by
the London Stock Exchange on 31 October 2007, being the last date prior
to BHP Billiton`s approach to Rio Tinto.
(e) The volume weighted average closing share price over the calendar
month ended 31 October 2007, being the last date prior to BHP Billiton`s
approach to Rio Tinto, is A$45.77 for BHP Billiton Limited and ?17.99 for
BHP Billiton Plc.
(f) The market value of BHP Billiton Limited Shares is based on the
closing price of a BHP Billiton Limited Share of A$39.32, provided by the
ASX on 4 February 2008, being the last practicable date prior to this
Announcement.
(g) The market value of BHP Billiton Plc Shares is based on the closing
price of a BHP Billiton Plc Share of ?16.49, provided by the London Stock
Exchange on 4 February 2008, being the last practicable date prior to
this Announcement.
(h) As at 4 February 2008 (being the last practicable date prior to this
Announcement) there were 2,232,522,894 BHP Billiton Plc Shares (including
25,515,350 BHP Billiton Plc Shares held by BHP Billiton Limited) and
3,358,359,496 BHP Billiton Limited Shares in issue.
(i) The market value of Rio Tinto Limited Shares is based on the closing
price of a Rio Tinto Limited Share of A$110.00, provided by the ASX on 31
October 2007, being the last date prior to BHP Billiton`s approach to Rio
Tinto.
(j) The market value of Rio Tinto plc Shares is based on the closing
middle-market price of a Rio Tinto plc Share of ?44.90, provided by the
London Stock Exchange on 31 October 2007, being the last date prior to
BHP Billiton`s approach to Rio Tinto.
(k) The volume weighted average closing share price over the calendar
month ended 31 October 2007, being the last date prior to BHP Billiton`s
approach to Rio Tinto is A$109.20 for Rio Tinto Limited and ?43.09 for
Rio Tinto plc.
(l) The market value of Rio Tinto Limited shares is based on the closing
price of a Rio Tinto Limited share of A$128.11, provided by the ASX on 4
February 2008, being the last practicable date prior to this
Announcement.
(m) The market value of Rio Tinto plc Shares is based on the closing
middle-market price of a Rio Tinto plc Share of ?55.27, provided by the
London Stock Exchange on 4 February 2008, being the last practicable date
prior to this Announcement.
(n) As at 4 February 2008 (being the last practicable date prior to this
Announcement) there were 456,815,943 Rio Tinto Limited Shares and
997,542,790 Rio Tinto plc Shares in issue. Rio Tinto plc, through Tinto
Holdings Australia Pty Limited, holds 171,072,520 shares in Rio Tinto
Limited.
(o) All references to the share capital or market capitalisation of Rio
Tinto Limited refer to the publicly traded shares, or free float, of Rio
Tinto Limited, which excludes the Rio Tinto Limited Shares held by a
wholly-owned subsidiary of Rio Tinto plc.
(p) All references to the share capital or market capitalisation of BHP
Billiton exclude shares held as treasury shares, shares currently held by
BHP Billiton Limited in BHP Billiton Plc and not yet cancelled and, in
relation to the Enlarged Group, any intra-DLC cross-holdings.
(q) The exchange rate of 2.077 US$/? and 0.927 US$/A$ on 31 October 2007.
(r) The exchange rate of 1.976 US$/? and 0.910 US$/A$ on 4 February 2008.
(s) All reference to nominal figures assume an inflation rate of 2.5 per
cent.
(t) In arriving at the estimate of cost savings and volume-driven
benefits, the Board of BHP Billiton has assumed the following:
- that, following completion, BHP Billiton acquires 100% of the shares in
Rio Tinto Limited and Rio Tinto plc without undue delay;
- that there will be no significant impact on the combined group arising
from any decisions made by competition authorities;
- that there will be no material change to the market dynamics in the
combined core markets following completion. In particular, BHP Billiton
has based these estimates on its understanding of current and future
market supply, demand and pricing levels; and
- there will be no material change to the relative exchange rates in the
combined core markets and geographies following completion.
(u) In arriving at the estimate of cost savings and volume-driven
benefits, the Board of BHP Billiton has assumed that there are comparable
operations, processes and procedures within Rio Tinto, except where
publicly available information clearly indicates otherwise. BHP
Billiton`s management, through a detailed understanding of BHP Billiton`s
cost structure, has determined the source and scale of realisable cost
savings. The one-off implementation cash costs of achieving the cost
savings and volume-driven benefits represents those costs which are
incremental to BHP Billiton`s existing plans. In addition to BHP
Billiton management`s information, the sources of information that BHP
Billiton has used to arrive at the estimate of cost savings include:
- Rio Tinto`s annual report and accounts;
- Rio Tinto`s presentations to analysts;
- Rio Tinto`s website;
- Documents and statements issued by Rio Tinto in connection with its
acquisition of Alcan;
- Analysts` research;
- Other public information; and
- BHP Billiton`s knowledge of the industry and of Rio Tinto.
(v) The Board of BHP Billiton has not had discussions with Rio Tinto`s
management regarding the reasonableness of their assumptions supporting
the estimate of cost savings and volume-driven benefits. Therefore, there
remains an inherent risk in this forward-looking estimate.
(w) Due to the scale of a combined BHP Billiton and Rio Tinto
organisation, there may be additional changes to the combined group`s
operations. In addition, there are several material assumptions
underlying the estimate, including the allocation of costs within Rio
Tinto, the relative proportion of volume-sensitive costs for both BHP
Billiton and Rio Tinto and the level of costs necessary to operate
effectively each combined function or activity. A detailed sensitivity
analysis was conducted to establish the robustness of the estimates to a
number of changes in the assumptions in addition to contingencies
factored in by management. Because of these factors and the fact that the
changes relate to the future, the resulting cost savings and volume-
driven benefits may be materially greater or less than those estimated.
APPENDIX V
REPORT ON ESTIMATED COST SAVINGS AND VOLUME-DRIVEN BENEFITS
The following are the texts of letters from KPMG and from Goldman Sachs
International relating to the BHP Billiton statement of estimated costs
savings and volume-driven benefits set out in this Announcement:
(a) from KPMG Audit Plc
KPMG Audit Plc
8 Salisbury Square
London EC4Y 8BB
United Kingdom
The Directors
BHP Billiton Limited
180 Lonsdale Street
Melbourne Vic 3000
The Directors
BHP Billiton Plc
Neathouse Place
London SW1V 1BH
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
5 February 2008, London
Dear Sirs
BHP BILLITON OFFER FOR RIO TINTO
We refer to the statement made by the directors of BHP Billiton Limited
and BHP Billiton Plc (`the Directors`) on page 15 of this document (`the
Statement`) to the effect that:
".BHP Billiton expects:
- US$1.7 billion nominal per annum of cost savings in the third full year
following completion, achieved through removal of duplication as well as
procurement and operating efficiency savings; and
- Further EBITDA enhancement of US$2.0 billion nominal per annum in the
seventh full year following completion, driven primarily by the
acceleration of volumes to customers.
In the seventh full year following completion this, therefore, is
expected to result in a total incremental EBITDA of US$3.7 billion
nominal per annum of quantified synergies.
The total one-off implementation cash costs related to achieving these
synergies are expected to amount to US$0.65 billion over the first two
years following completion."
The Statement has been made in the context of the disclosures in notes
(s) to (w) of Appendix IV setting out, inter alia, the basis of the
Directors` belief (including sources of information) supporting the
Statement and their analysis and explanation of the underlying
constituent elements.
This report is required by Note 8(b) to Rule 19.1 of the City Code on
Takeovers and Mergers (`the City Code`) and is given for the purpose of
complying with that requirement and for no other purpose.
Responsibility
The Statement is the responsibility solely of the Directors. It is our
responsibility and that of Goldman Sachs International to form respective
opinions, as required by Note 8(b) to Rule 19.1 of the City Code as to
whether the Statement has been made by the Directors with due care and
consideration.
Save for any responsibility which we may have to those persons to whom
this report is expressly addressed, to the fullest extent permitted by
law we do not assume any responsibility and will not accept any liability
to any other person for any loss suffered by any such other person as a
result of, arising out of, or in connection with this report.
Basis of opinion
We have discussed the Statement, together with the underlying plans, with
the Directors and with Goldman Sachs International. We have also
considered the letter dated 5 February 2008 from Goldman Sachs
International to the Directors on the same matter. We conducted our work
in accordance with Standards for Investment Reporting issued by the
Auditing Practices Board of the United Kingdom.
We do not express any opinion as to the achievability of the benefits
identified by the Directors in the Statement. The Statement is subject
to uncertainty as described in this document. Because of the significant
changes in the enlarged group`s operations expected to flow from the
acquisition and because the Statement relates to the future, the actual
benefits achieved are likely to be different from those anticipated in
the Statement and the differences may be material.
Opinion
On the basis of the foregoing, we report that in our opinion the
Directors have made the Statement, in the form and context in which it is
made, with due care and consideration.
Yours faithfully
KPMG Audit Plc
(b) from Goldman Sachs International
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
The Directors
BHP Billiton Limited
180 Lonsdale Street
Melbourne Vic 3000
The Directors
BHP Billiton Plc
Neathouse Place
London SW1V 1BH
5 February 2008
Dear Sirs
BHP BILLITON OFFER FOR RIO TINTO
We refer to the statement of estimated cost savings and volume-driven
benefits, the bases of preparation thereof and the notes thereto
(together the "Statement") made by BHP Billiton Limited and BHP Billiton
Plc ("BHP Billiton") set out in this document, for which the Directors of
BHP Billiton are solely responsible.
We have discussed the Statement (including the assumptions and sources of
information referred to therein), with the Directors of BHP Billiton and
those officers and employees of BHP Billiton who developed the underlying
plans. The Statement is subject to uncertainty as described in this
document and our work did not involve an independent examination of any
of the financial or other information underlying the Statement.
We have relied upon the accuracy and completeness of all the financial
and other information reviewed by us and have assumed such accuracy and
completeness for the purposes of rendering this letter. We have also
reviewed the work carried out by KPMG and have discussed with them the
conclusions stated in their letter of 5 February 2008 addressed to
yourselves and ourselves on this matter.
We do not express any opinion as to the achievability of the cost savings
and estimated volume-driven benefits identified by the Directors of BHP
Billiton.
This letter is provided pursuant to our engagement letter with BHP
Billiton solely to the Directors of BHP Billiton in connection with Note
8 (b) of Rule 19.1 of the City Code on Takeovers and Mergers and for no
other purpose. We accept no responsibility to Rio Tinto or its
shareholders or any other person other than the Directors of BHP Billiton
in respect of the contents of, or any matter arising out of or in
connection with, this letter.
On the basis of the foregoing, we consider that the Statement by BHP
Billiton, for which the Directors of BHP Billiton are solely responsible,
has been made with due care and consideration in the context in which it
was made.
Yours faithfully
Simon Dingemans
Managing Director
For and on behalf of
Goldman Sachs International
APPENDIX VI
DEFINITIONS
"ACCC" Australian Competition and Consumer
Commission;
"Acquisition" the proposed acquisition by BHP
Billiton Limited of all of the
shares in Rio Tinto plc and all of
the shares in Rio Tinto Limited
pursuant to the terms (as varied)
set out in this Announcement by
means of the Rio Tinto plc Offer
and the Rio Tinto Limited Offer
respectively;
"Announcement" this announcement;
"Announcement Date" the time of announcement of the
Offers, being:
9.30pm London time on 5 February
2008; and
8.30am Melbourne time on 6 February
2008;
"Approval" a licence, authority, consent,
permission, approval, order,
clearance, exemption, agreement,
recognition, grant, confirmation,
waiver, ruling, determination or
decision;
"ASIC" the Australian Securities and
Investments Commission;
"ASX" ASX Limited or the stock exchange
conducted by ASX Limited, as the
context requires;
"Australia" the Commonwealth of Australia, its
states, territories and
possessions;
"Australian the Corporations Act 2001 (Cth);
Corporations Act"
"Australian Trade the Australian Trade Practices Act
Practices Act" 1974 (Cth);
"BHP Billiton" the DLC comprising two listed
parent entities - BHP Billiton Plc
and BHP Billiton Limited;
"BHP Billiton Bidder`s the document to be sent to Rio
Statement" Tinto Limited Shareholders pursuant
to Chapter 6 of the Australian
Corporations Act which will
contain, among other things, the
form of offer for the Rio Tinto
Limited Offer;
"BHP Billiton EGMs" the extraordinary general meetings
of BHP Billiton Plc shareholders
and BHP Billiton Limited
shareholders as may be convened for
the purposes of considering, and if
thought fit, approving the BHP
Billiton Shareholder Resolutions;
"BHP Billiton Group" BHP Billiton Limited, BHP Billiton
Plc and their respective controlled
entities;
"BHP Billiton Limited the American depository receipts
ADRs" evidencing BHP Billiton Limited
American Depository Shares each
representing two BHP Billiton
Limited Shares;
"BHP Billiton Limited the ordinary shares in the share
Shares" capital of BHP Billiton Limited;
"BHP Billiton Plc ADRs" the American depository receipts
evidencing BHP Billiton Plc
American Depository Shares each
representing two BHP Billiton Plc
Shares;
"BHP Billiton Plc ordinary shares of US$0.50 each in
Shares" the share capital of BHP Billiton
Plc;
"BHP Billiton the document to be sent with the
Prospectus" Rio Tinto plc Offer Document to Rio
Tinto plc Shareholders constituting
a prospectus for the purpose of the
Financial Services and Markets Act
2000 in relation to the New BHP
Billiton Limited Shares and the New
BHP Billiton Plc Shares;
"BHP Billiton such resolutions as are necessary
Shareholder by the shareholders of BHP Billiton
Resolutions" Plc and BHP Billiton Limited to
approve, implement and effect the
Rio Tinto plc Offer and the Rio
Tinto Limited Offer and the
acquisition of the Rio Tinto plc
Shares and the Rio Tinto Limited
Shares including resolutions to
increase the share capital of BHP
Billiton Plc and to authorise the
creation and allotment of the New
BHP Billiton Plc Shares and permit
the acquisition of the Interim
Shares by BHP Billiton Plc;
"Canadian Commissioner" the Commissioner of Competition
appointed pursuant to Section 7 of
the Competition Act;
"Canadian Competition the Competition Act (Canada),
Act" R.S.C. 1985, c. C-34 (as amended);
"Constitution" in relation to a company, means the
constitution, or memorandum and
articles of association, or other
constituent document of, the
company;
"DLC" A dual-listed company;
"EBITDA" earnings before interest, taxes,
depreciation and amortisation;
"Enlarged Group" the BHP Billiton Group following
completion of the Acquisition;
"Exchange Act" US Securities Exchange Act of 1934
(as amended);
"FATA" the Foreign Acquisitions and
Takeovers Act 1975 (Cth);
"Interim Shares" the securities to be issued by BHP
Billiton Limited to holders of Rio
Tinto plc Shares pursuant to the
Rio Tinto plc Offer, which
securities will immediately be
exchanged for New BHP Billiton Plc
Shares;
"Iron Ore Assets" the iron ore mining rights, mining
tenements, leases, licences or
other interests in any form
including, but not limited to:
(a) any right, title or interest
held pursuant to any State
Agreement or the Mining Act or
under any pending State Agreement
or the Mining Act or any approved
or pending proposals under any such
State Agreement or the Mining Act;
(b) Any right title or interest
held pursuant to any Joint Venture
Agreement or under any other
pending Joint Venture Agreement and
approved or pending proposals under
any such Joint Venture Agreement;
(c) trademarks, brands, copyright
or marketing tools or intellectual
property and technology;
(d) any rights under contracts for
the sale of iron ore products from
Western Australia,
owned, operated, controlled or held
by any member of the Rio Tinto
Group and any other assets owned,
operated or controlled by any
member of the Rio Tinto Group in
connection with its Iron Ore
Business, including, but not
limited to:
(a) the Rio Tinto Group`s interest
in the Robe River joint venture,
including in the mines, rail and
port facilities controlled or
operated by or pursuant to the Robe
River joint venture;
(b) the mines, rail and port
facilities owned or operated by
Hamersley Iron;
(c) the Rio Tinto Group`s interest
in the Hope Downs joint venture,
including in the mines, rail and
port facilities controlled or
operated by or pursuant to the Hope
Downs joint venture;
(d) the mines, rail and port
facilities owned or operated by
Pilbara Iron;
(e) the Rio Tinto Group`s interest
in the Rhodes Ridge joint venture,
including in the mines, rail and
port facilities controlled or
operated by or pursuant to the
Rhodes Ridge joint venture;
(f) the mines, rail and port
facilities at Corumb?, Paraguay;
(g) the Rio Tinto Group`s interest
in the Rio Tinto Orissa Mining
joint venture, including the
studies, the iron ore leases and
other property held by the Rio
Tinto Orissa Mining joint venture;
(h) the assets including studies
and property relating to the
Simandou project in West Guinea;
(i) the Rio Tinto Group`s interest
in the Channar joint venture,
including in the mines, rail and
port facilities controlled or
operated by or pursuant to the
Channar joint venture; and
(j) the Rio Tinto Group`s interest
in the Eastern Range joint venture,
including in the mines, rail and
port facilities controlled or
operated by or pursuant to the
Eastern Range joint venture;
"Iron Ore Business" the production or sale of iron ore
products using the Iron Ore Assets;
"Joint Venture any agreement pursuant to which any
Agreement" member of the Rio Tinto Group holds
an interest in any joint venture
entity, whether a company,
unincorporated firm, undertaking,
joint venture, association,
partnership or any other entity;
"London Stock Exchange" the London Stock Exchange Plc;
"Material Rio Tinto any agreement, arrangement,
Agreement" licence, permit or other instrument
that is material in the context of
the business of the Rio Tinto Group
and to which any member of the Rio
Tinto Group is a party or by which
any such member or any of its
assets may be bound, entitled or
subject. An agreement,
arrangement, licence, permit or
other instrument is taken to be
material in the context of the
business of the Rio Tinto Group if
the termination of it would or
would be likely to materially
adversely affect the value of the
long-term revenues or costs or the
assets or liabilities of the Rio
Tinto Group;
"Material Rio Tinto (a) any business, asset (including
Asset" shares or other securities) or
property of any member of the Rio
Tinto Group which is material in
the context of the business of the
Rio Tinto Group; or
(b) any Iron Ore Asset that is
material in the context of the Iron
Ore Business.
For the avoidance of doubt, a
reference in paragraph (a) above to
assets includes (without
limitation) Iron Ore Assets;
"Mining Act" the Mining Act 1978 (Western
Australia);
"Mix and Match the mix and match facility as
Facility" described in paragraph 2 of this
Announcement;
"New BHP Billiton the BHP Billiton Limited Shares to
Limited Shares" be issued pursuant to the Rio Tinto
plc Offer or the Rio Tinto Limited
Offer;
"New BHP Billiton Plc the BHP Billiton Plc Shares to be
Shares" issued pursuant to the Rio Tinto
plc Offer;
"Offers" the Rio Tinto Limited Offer and the
Rio Tinto plc Offer;
"Pre-conditions" the pre-conditions to the posting
of the Rio Tinto plc Offer Document
and related Rio Tinto plc Offer
Form of Acceptance and the BHP
Billiton Bidder`s Statement and
related Rio Tinto Limited Offer
Form of Acceptance which are set
out in Appendix I to this
Announcement and "Pre-condition"
means any of them;
"Public Authority" any government or any governmental,
semi-governmental, administrative,
trade, regulatory, statutory or
judicial entity, tribunal,
authority, agency or association,
whether in Australia or elsewhere,
including the ACCC. It also
includes any governor, governor-in-
council, minister of state or other
government official and any self-
regulatory organisation established
under statute or any stock
exchange. However, when used in
Condition (I), it does not include
the Australian Takeovers Panel,
ASIC or any court that hears or
determines proceedings under
section 657G of the Australian
Corporations Act or proceedings
commenced by a person specified in
section 659B(1) of the Australian
Corporations Act in relation to the
Acquisition;
"Publicly-held Rio the Rio Tinto Limited Shares the
Tinto Limited Shares" beneficial owners of which are not
Rio Tinto plc or a subsidiary of
Rio Tinto plc, where subsidiary has
the meaning ascribed to that term
in section 736 of the Companies Act
1985 (United Kingdom) as at the
date of adoption of the
constitution of Rio Tinto Limited,
being 24 May 2000;
"Regulatory Information the Company Announcements Office
Service" and/or the RNS provided by the
London Stock Exchange and/or any
other channel recognised from time
to time as a channel for the
dissemination of regulatory
information by listed companies
under the UK Listing Rules;
"Relevant Acquisition" an acquisition of:
(a) Rio Tinto plc Shares by BHP
Billiton Limited;
(b) Rio Tinto Limited Shares by BHP
Billiton Limited;
(c) Interim Shares by BHP Billiton
Plc; or
(d) BHP Billiton Limited Shares
issued as consideration for the
acquisition of the Rio Tinto
Limited Shares that were held by
Tinto Holdings Australia Pty Ltd or
a member of the Rio Tinto Group;
"Relevant Period" the period commencing on the
Announcement Date and ending at the
end of:
(a) with respect to the Rio Tinto
plc Offer, the Rio Tinto plc Offer
Period; and
(b) with respect to Rio Tinto
Limited, the Rio Tinto Limited
Offer Period;
"Rio Tinto" the DLC comprising two listed
entities - Rio Tinto plc and Rio
Tinto Limited;
"Rio Tinto DLC the agreements and documents
Agreements" constituting the Rio Tinto DLC
including the DLC Merger Sharing
Agreement between Rio Tinto plc and
Rio Tinto Limited, the RTZ
Shareholder Voting Agreement and
the CRA Shareholder Voting
Agreement between, among others,
Rio Tinto plc, Rio Tinto Limited
and Law Debenture Trust Corporation
plc, and certain Trust Deeds and
Deed Polls, each dated on or about
21 December 1995 (as amended at the
Announcement Date);
"Rio Tinto Group" Rio Tinto Limited, Rio Tinto plc
and their respective controlled
entities;
"Rio Tinto Limited the holding of approximately 37% of
Cross-holding" Rio Tinto Limited Shares held by
Tinto Holdings Australia Pty Ltd, a
wholly owned subsidiary of Rio
Tinto plc;
"Rio Tinto Limited the takeover bid to be made by BHP
Offer" Billiton Limited for Rio Tinto
Limited Shares once the Pre-
conditions have been satisfied or
waived (as varied or extended);
"Rio Tinto Limited the conditions of the Rio Tinto
Offer Conditions" Limited Offer described in Appendix
III to this Announcement;
"Rio Tinto Limited the Rio Tinto plc Offer Condition
Offer Defeating which relates to the fulfilment or
Condition" waiver of the Rio Tinto Limited
Offer Conditions, being
paragraph (O) of the Rio Tinto plc
Offer Conditions;
"Rio Tinto Limited the form of acceptance and
Offer Form of authority relating to the Rio Tinto
Acceptance" Limited Offer accompanying the BHP
Billiton Bidder`s Statement;
"Rio Tinto Limited the period during which the Rio
Offer Period" Tinto Limited Offer is open for
acceptance;
"Rio Tinto Limited the date set by BHP Billiton
Register Date" Limited under section 633(2) of the
Australian Corporations Act (as it
applies to Rio Tinto Limited);
"Rio Tinto Limited fully paid ordinary shares in the
Shares" capital of Rio Tinto Limited being
shares which exist at the Rio Tinto
Limited Register Date or come into
existence during the Rio Tinto
Limited Offer Period as a result of
the conversion of, or exercise of
rights attached to, options or
other securities issued under the
Rio Tinto Limited Share Schemes
being options or securities in
existence at the Rio Tinto Limited
Register Date;
"Rio Tinto Limited the Rio Tinto Limited Share Option
Share Schemes" Plan, Rio Tinto Limited Share
Savings Plan and Rio Tinto Limited
Mining Companies Comparative Plan;
"Rio Tinto Limited the holders of Rio Tinto Limited
Shareholders" Shares;
"Rio Tinto plc ADRs" the American depository receipts
evidencing Rio Tinto plc American
Depository Shares each representing
four Rio Tinto plc Shares;
"Rio Tinto plc Offer" the offer for Rio Tinto plc Shares,
including the US Offer, to be made
by BHP Billiton Limited once the
Pre-conditions have been satisfied
or waived, in the terms and
conditions set out in Appendix II
of this Announcement and to be set
out in the Rio Tinto plc Offer
Document and the Registration
Statement on Form F-4 including,
where the context so requires, any
subsequent revision, variation,
extension or renewal of the Rio
Tinto plc Offer;
"Rio Tinto plc Offer the conditions of the Rio Tinto
Conditions" plc Offer set out in Appendix II to
this Announcement;
"Rio Tinto plc Offer the Rio Tinto Limited Offer
Defeating Condition" Condition which relates to the
fulfilment or waiver of the Rio
Tinto plc Offer Conditions, being
paragraph (O) of the Rio Tinto
Limited Offer Conditions;
"Rio Tinto plc Offer the document to be sent to Rio
Document" Tinto plc Shareholders once the Pre-
conditions have been satisfied or
waived, containing and setting out
the full terms and conditions of
the Rio Tinto plc Offer;
"Rio Tinto plc Offer the form of acceptance and
Form of Acceptance" authority relating to the Rio Tinto
plc Offer accompanying the Rio
Tinto plc Offer Document;
"Rio Tinto plc Offer the period during which offers made
Period" under the Rio Tinto plc Offer are
open for acceptance;
"Rio Tinto plc the holders of Rio Tinto plc
Shareholders" Shares;
"Rio Tinto plc Shares" the existing unconditionally
allotted or issued and fully paid
(or credited as fully paid)
ordinary shares of 10p each in the
capital of Rio Tinto plc and any
further such shares which are
unconditionally allotted or issued
on or prior to the date on which
the Rio Tinto plc Offer closes or,
subject to the provisions of the UK
Code, such earlier date or dates as
BHP Billiton Limited may decide;
"Rio Tinto plc Share the Rio Tinto plc Share Option
Schemes" Plan, Rio Tinto plc Share Savings
Plan, Rio Tinto plc Mining
Companies Comparative Plan, Rio
Tinto Management Share Plan and Rio
Tinto plc Share Ownership Plan;
"SEC" United States Securities and
Exchange Commission;
"Securities Act" US Securities Act of 1933, as
amended;
"Share Sale Facility" the share sale facility described
in paragraph 15 of this
Announcement;
"South African South African Competition Act, 89
Competition Act" of 1998, as amended;
"State Agreement" any Government agreement pursuant
to the Government Agreements Act
1979 (Western Australia);
"UK Code" The City Code on Takeovers and
Mergers;
"UK Companies Act 2006" the Companies Act 2006 (UK);
"UKLA" or "UK Listing the Financial Services Authority
Authority" acting in its capacity as the
competent authority for the
purposes of Part VI of the
Financial Services and Markets Act
2000;
"UK Listing Rules" the listing rules of the UK Listing
Authority;
"UK Official List" the official list maintained by the
UK Listing Authority;
"UK Panel" The Panel on Takeovers and Mergers;
"Underlying EBIT" earnings before net finance costs
and taxation and any exceptional
items;
"United Kingdom" or the United Kingdom of Great Britain
"UK" and Northern Ireland;
"United States" or "US" the United States of America, its
territories and possessions, any
State of the United States of
America and the District of
Columbia, and all other areas
subject to its jurisdiction; and
"US Offer" part of the Rio Tinto plc Offer
being the offer to US holders of
Rio Tinto plc Shares and to holders
of Rio Tinto plc ADRs wherever
located to be made by BHP Billiton
Limited once the Pre-conditions
have been satisfied or waived, in
the terms and conditions set out in
Appendix II of this Announcement
and to be set out in the
Registration Statement on Form F-4
including where the context so
requires, any subsequent revision,
variation, extension or renewal of
the US Offer.
For the purpose of these definitions, an entity that is controlled by
another entity is a "controlled entity" of the other entity. An entity
controls a second entity if the first entity has the capacity to
determine the outcome of decisions about the second entity`s financial
and operating policies. In determining whether the first entity has this
capacity:
- the practical influence the first entity can exert (rather than the
rights it can enforce) is the issue to be considered; and
- any practice or pattern of behaviour affecting the second entity`s
financial or operating policies is to be taken into account (even if it
involves a breach of an agreement or a breach of trust).
However:
(i) the first entity does not control the second entity merely because
the first entity and a third entity jointly have the capacity to
determine the outcome of decisions about the second entity`s financial
and operating policies;
(ii) if the first entity:
- has the capacity to influence decisions about the second entity`s
financial and operating policies; and
- is under a legal obligation to exercise that capacity for the benefit
of someone other than the first entity`s members;
the first entity is taken not to control the second entity.
(1) Based on the volume weighted average market capitalisation of BHP
Billiton and Rio Tinto over the month prior to the approach by BHP
Billiton to Rio Tinto.
(2) Assuming full acceptance of the Offers on a fully diluted basis.
(3) On the basis that BHP Billiton acquires 100 per cent of the shares in
Rio Tinto Limited and Rio Tinto plc on the offer terms of 3.4 BHP
Billiton shares for each Rio Tinto share.
(4) On the basis that BHP Billiton acquires 100 per cent of the shares in
Rio Tinto Limited and Rio Tinto plc on the offer terms of 3.4 BHP
Billiton shares for each Rio Tinto share.
(5) On the basis that BHP Billiton acquires 100 per cent of the shares
in Rio Tinto Limited and Rio Tinto plc on the offer terms of 3.4 BHP
Billiton shares for each Rio Tinto share.
(6) Unless otherwise stated production volumes exclude suspended and sold
operations.
(7) Held by the family company Alamiste Pty Ltd, DR & PA Trustee for the
self-managed Alamiste superannuation fund and Mrs PA Argus.
(8) Held by Melpeat Pty Limited.
(9) Held by HSBC nominees on behalf of Dr Morgan and the following
persons connected with Dr Morgan: the Raymor Trust, Roslyn Joan Kelly and
RJK Super Fund.
Date: 06/02/2008 15:51:28 Produced by the JSE SENS Department.
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