Rio Tinto (RTP) Plans To Fight Off BHP Billiton (BHP) Bid

By Douglas A. McIntyre Published Nov 25, 10:52AM EST

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The Times of London reports that metals company Rio Tinto (RTP) plans an all-out attack against suitor BHP Billiton (BHP). According to the paper "Tom Albanese, Rio’s chief executive, will highlight his firm’s record of identifying and exploiting mining assets, and attack BHP’s track record and claims for synergies in combining the two companies." The Times adds "a combination of BHP and Rio would create a natural-resources giant controlling almost 40% of internationally traded iron ore."

Rio Tinto shareholders should take the BHP deal ASAP, especially if they can get a piece of it in cash. RTP shares are up 110% since the beginning of the year, and, so far there is no other buyer for the company. The stock traded at $221 this last August and moved over $480 last week.

Part of the argument against the deal is that there are not "synergies" between the two companies and that cost cutting will not produce significant savings going forward. But, Rio Tinto is buying Alcan based on similar assumptions. Neither party in that transaction has said that the math is faulty.

Time for Rio Tinto to sell out.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.