BHP is currently offering 3.4 of its shares for every one Rio share but it is rumoured the company could raise that offer to four shares. At current prices, that offer would be worth $148.68 per Rio share, which is currently trading at around $145.94, up $5.34.
Speaking to media Wednesday, Rio chief Tom Albanese again said the company’s value was “far in excess” of BHP’s offer. He also questioned the true value of BHP’s petroleum division and again emphasised Rio’s strength in aluminium.
It remains to be seen whether a four-for-one offer would come closer to giving Rio what it considers a fair value, if a renewed offer is even a consideration for BHP.
Some market watchers have dismissed the claim as yet another empty rumour, questioning whether BHP would be willing to pay a premium at a time when the company could have the upper hand over its rival – depending on its next set of production figures – and the ratio of Rio to BHP shares is below BHP’s offer.
Either way, the takeover bid is expected to be ongoing until at least the end of the year.
Meanwhile, analysts from Fairfax in London said Rio’s mixed three month production result – up in aluminium and iron ore on a yearly basis, but down in iron ore and copper quarter-on-quarter – was a “poor performance” considering the takeover bid.
Numis Securities, also based in London, said the company’s production data was “marginally shy of its hopes” but would only affect full-year figures fractionally.
“We believe Rio Tinto has outperformed so far in marketing the vale of the business butâ€Â¦BHP Billiton now has more dry powder for catching up in this respect, especially in terms of demonstrating volume growth potential,” the brokerage said.
The brokerage also tipped the Australian majors to win iron ore price rises in the range of 75-90%, however it lowered its recommendation for Rio to Hold from Buy, saying the company was close to fully valued already.
Goldman Sachs JBWere, meanwhile, said Rio’s quarterly results came in below expectations, according to Dow Jones Newswires.
