Yes, the stock market has been reading the Rio Tinto / BHP Billiton situation correctly. Word reaches FT Alphaville that BHP, using Citi, has arranged a $70bn line of financing. Clearly, the Anglo-Australian miner is going hostile in the pursuit of its smaller rival. And there is going to be a substantial cash element to its next offer. Pedigree City sources say that BHP - egged on by Goldman Sachs - has actually been preparing an aggressive move since Rio politely declined its advances last weekend. Its provisional timetable pointed to a hostile move a fortnight after the initial approach, but the enthusiasm of those pushing Rioâs share price another six per cent higher on Friday may well have accelerated BHPâs planning. Either way, people intimately involved in this mining matter expect the whole thing to go 100 per cent political by Monday. Think in terms of diplomatic incidents. Why? Because the Chinese government will treat it as an attempt to create an effective monopoly in the supply of iron ore. http://ftalphaville.ft.com/blog/200...o-go-hostile-financing-arranged-through-citi/
is there such thing as 'hostile' takeover btw?the ceo of rio is not the owner and his opinion doesnt count for every shareholder
Gargantuan-size mergers usually mark the end of a bull market in their industry sector. The failure to complete a merger would be bad news too.