LONDON (Dow Jones/AP) — BHP Billiton PLC ended months of speculation Thursday when it confirmed it had approached rival miner Rio Tinto PLC on a potential deal believed to value more than $100 billion.
Rio Tinto rejected the proposal, which could turn into a protracted and hostile takeover battle.
BHP Billiton said it wrote twice to Rio Tinto and now ''intends to continue to seek an opportunity to meet and discuss its proposal with Rio Tinto.''
Rio Tinto's objection to the deal is that it ''significantly undervalues'' the company, it said in a statement.
Should a competitive bidding process emerge as other mining companies enter the fray, cash will likely be king, placing BHP Billiton in a strong position, analysts said. BHP's bid is an all-share offer, with each Rio Tinto share to be exchanged for three of its own.
Brazilian miner Companhia Vale do Rio Doce, the world's largest iron ore producer and exporter, declined to comment on the news. Earlier this year, speculation swirled that CVRD would team with BHP Billiton in a joint bid for Rio Tinto, then break up the company.