THE chief executive of BHP Billiton, Marius Kloppers, is considering submitting an unchanged $150 billion bid (£75 billion) to Rio Tinto’s shareholders ahead of the “put up or shut up” that has been set for the first week in February.

The weight of City opinion says BHP must raise its current informal offer of three shares for each Rio share to a ratio closer to four to one. But Kloppers and his advisers want to test the resolve of Rio’s investors.

Rio’s share price has been the biggest riser in the FTSE 100 this year and if a bid is abandoned some $40 billion of value could be wiped from its market value.

This is one of several options being considered along with increasing the cash component of any bid. But BHP has not made a decision and it is expected to wait some weeks before it does.

The chairman and chief executive of Rio, Paul Skinner and Tom Albanese, have both set out a strong case for their mining firm retaining its independence and they have attempted to high-light the hidden value in the group’s assets.

Skinner has written to the group’s investors saying the outlook is “exceptional”.

There is mounting speculation that Chinese mining groups and the government have talked to international banking advisers on exploring an alternative approach to Rio. China is concerned that a merger between BHP and Rio could lead to higher prices for iron ore. However, BHP has also held talks at senior levels within the Chinese government to allay these fears.

Britain’s Takeover Panel has now forced BHP to submit an offer by February 6. If one is not forthcoming, the dual-listed mining company will be barred from mounting another bid for six months. Several big international fund managers have added to their shareholding in Rio in recent weeks, a demonstration that they believe in the group’s long-term value.

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