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China Initiating Bidding War For Rio?
FN Arena News - November 26 2007

By Rudi Filapek-Vandyck


BHP Billiton's (BHP) attempt to create the world's largest resources giant may face some serious headwinds from the mutual customer base as China is about to do what every resources hungry customer would do - if they had the means for it- and that is launch their own bid for corporate target Rio Tinto ((RIO)).


According to Beijing-based weekly China Business China's newly launched sovereign wealth fund - China Investment Company - is about to join with Baosteel, Shougang group, Angang group and some other firms controlled by the central government to make a formal bid for Rio Tinto valuing the company at some US$200bn - a hefty premium above the USD142bn implied by the informal BHP approach.


The story was based on unnamed sources familiar with the matter and no further information was provided, Chinese news service Xinhua reports.


BHP Billiton's takeover bid for Rio Tinto have triggered concerns among China steelmakers that a combined entity will have too much power over iron ore pricing.