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Rio Tinto: Getting Tougher to Swallow

Rival BHP Billiton wants to take over the mining multinational, but better-than-expected second-half results mean Rio can still resist

Will they or won't they agree to a takeover? That was the question on everyone's lips Feb. 13 as mining giant Rio Tinto (RTP) sought to quell speculation surrounding an unsolicited $147.4 billion merger bid from rival BHP Billiton (BHP), which would create one of the world's largest companies. The London-listed company's ability to resist takeover was strengthened by its better-than-expected results, which saw net income in the second half of 2007 rise 11% year-over-year to $4.06 billion.

The figures further cloud BHP's attempt to acquire the world's third-largest mining company. Only a week earlier (, 2/6/08), BHP had reported its own earnings—including a 2.4% drop in net income, to $6.02 billion, over the same period. The divergence in fortunes comes as BHP has raised its bid 13% to woo Rio Tinto shareholders skeptical of the deal's benefits.