BHP Renews Bid for Rio Tinto

BHP Billiton (BHP Quote - Cramer on BHP - Stock Picks) has increased its hostile stock offer for fellow miner Rio Tinto (RTP Quote - Cramer on RTP - Stock Picks), upping the ante in its bid to create a mammoth resources firm.

Previously, Australia's BHP had offered three shares for each share of Rio Tinto, but now it says it's raising the proposal to 3.4 shares. The U.K.'s Rio Tinto has thus far refused to negotiate with BHP.

BHP said its stockholders would own 56% of the combined company, and Rio Tinto investors would hold the remaining 44%. Based on BHP's closing price Feb. 4, the offer is worth $147.4 billion, BHP said. That's down from $173.6 billion last fall, when BHP first approached Rio Tinto, because of a decline in its share price.

If Rio Tinto were to accept BHP's new approach and the deal is completed, it would be the latest megamerger to reshape the mining industry in recent years. Among the biggest takeovers have been Freeport-McMoRan Copper & Gold (FCX Quote - Cramer on FCX - Stock Picks) buying Phelps Dodge, Companhia Vale do Rio Doce (RIO Quote - Cramer on RIO - Stock Picks) acquiring Inco and Rio Tinto purchasing Alcan.

Last week, Alcoa (AA Quote - Cramer on AA - Stock Picks) and the Aluminum Corp. of China (ACH Quote - Cramer on ACH - Stock Picks) said they would work together to buy a 12% stake in Rio Tinto.

Separately, BHP reported revenue of $25.54 billion for the six months ended Dec. 31, up 15.5% from the same period in 2006. The company's profit from operations climbed nearly 4% to $9.49 billion from $9.13 billion.

BHP was tacking on 2 cents to $69.50 in after-market trading. Rio Tinto was up 4.4% to $440.05.