Rio Gains in Sydney After Report BHP May Revive Bid

By Rebecca Keenan

March 30 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, rose in Sydney trading after the Sunday Telegraph reported that BHP Billiton Ltd. may revive its failed takeover bid.

Rio, seeking approval for a proposed $19.5 billion investment from Aluminum Corp. of China, rose 0.6 percent to A$57.20 on the Australian stock exchange. Melbourne-based BHP declined 4.3 percent and the benchmark index fell 1.9 percent.

BHP may revisit a takeover or form partnerships with Rio after informal meetings between the management of the two companies, according to the Sunday Telegraph. BHP abandoned its $66 billion bid for Rio last year, citing declining commodity markets, the slowing global economy and Rio’s high-level of debt.

“So much has changed since the deal break which we feel may compel BHP to reconsider bidding,” Liberum Capital Ltd. analysts led by Michael Rawlinson said in a March 27 report. “Capital markets are reopening, easing concerns over both the financiablity of a new deal and the viability of European Union forced disposals.”

Rio Chief Financial Officer Guy Elliot said last week it had an alternative plan should the planned deal with Chinalco, as the state-owned company is known, fail.

BHP spokeswoman Samantha Evans declined today to comment on the report when contacted.

Australia’s Treasurer Wayne Swan will make a decision on whether to approve Chinalco’s proposal after he receives a recommendation from the Foreign Investment Review Board. Swan said today he has met with “all involved in the application.”

“As is usual, when there are foreign-investment applications around I will meet with leaders and members of those organizations from all sides,” he said in an interview in Tokyo.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net