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China’s Baosteel denies reports on Rio Tinto bid

China’s Baosteel denies reports on Rio Tinto bid

Shanghai: Baosteel, China’s biggest steelmaker, has denied reports that it was planning a takeover bid for Rio Tinto Ltd/Plc, but said it was keeping a close eye on the developments.

“The Baosteel Group thinks that reports about Baosteel’s planning to take over Rio Tinto are not true," said the parent of Baoshan Iron and Steel Co. in a statement.

The denial comes a day after state newspapers carried a denial by Baosteel Chairman Xu Lejiang of an earlier local media report that he had expressed interest in mounting a rival bid. “The company lacks the financial muscle," Xu said.

“Baosteel thinks the launching of BHP Billiton’s bid to buy Rio Tinto will have huge implications for the world’s steel and non-ferrous metal industries," Baosteel said, adding that it will continue to study and monitor developments.

BHP Billiton Ltd/Plc, the world’s largest miner, has approached third-ranked Rio Tinto with a $125 billion (Rs49,26,874 crore) all-share takeover proposal.

Rio Chief Executive Tom Albanese has rejected the proposal as too low. He said on 7 December that BHP Billiton’s takeover proposal to assemble a super-sized miner was now dead in the water.

Albanese also said Rio had been approached with offers from other suitors since BHP launched its bid last month, but was sticking with its independent growth strategy.

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