Capstone

Find out more about Subscribing Companies
Unique access to energy
investors. Global distribution
of company news.
Find out more.
Sign up for our free weekly newsletter
Informed comment and independent news delivered
by email every week.
Sign up here.
Find out more about Minesite Forums
Management and investors
are brought together at our
investor forums.
Find out more.
Bulletin Board
Join other informed investors.
Debate mining companies.
Visit Bulletin Boards.
OPUS Executive
An Insider's Guide to the Mining Sector, 2nd edition
Exchange Traded Gold
Bishopsgate Communications
T1ps Spreadbetting
Ian Plimer: Heaven and Earth
HighGrade.net
Commodity Watch Radio
Jobs4mining
Doug Casey Research
UNCTAD
Ocean Equities Ltd
Bullion Desk
allipo.com
Ambrian Capital

News


November 28, 2008

The Outcome Of The Proposed Bid By BHP Billiton For Rio Tinto Had An Air Of Inevitability About It


By Charles Wyatt


So the BHP Billiton offer to acquire Rio Tinto has at last been aborted, but not before costing BHP Billiton the sum of US$450 million. It would be a fair guess to say that Rio Tinto had to spend a slightly smaller sum, say US$300 million, in defending itself, but that is only part of it. Add in the unquantifiable costs to both companies of senior executives taking their eyes off the ball of running their divisions for a whole year while they devoted themselves to the proposed merger, and you can probably double these figures to a total of US$1.5 billion. A staggering figure this, which can only be seen as a testament to the unbridled ambitions of Marius Kloppers, chief executive of BHP Billiton, who wanted to be king of the mining world. Just to put it in context this sum is four times the total profits earned by all the junior mining companies listed on Aim over the last 10 years.

It was the EU regulators who wielded the axe in the end, and it is amazing that Mr Kloppers and his advisors did not see this coming ages ago. After all, the original bid was made a year ago, following a rash of rumours during the preceding months. But a little knowledge of history could have saved all that time and money for both companies. Back in 1952 the European Coal and Steel Community was set up following on from the Schuman Plan which was laid out in 1950 and takes its name from the...

Restricted Area

Please login or register (FREE, quick and easy) to read the full article.