Recent news, this piece care of Bloomberg, now says that Australian regulators have allowed the Chinese to increase their stake in Rio. It could be that the regulators down under frown on the merger of BHP and Rio because (1) they're afraid of offending China, customer numero uno and/or (2) they're not keen on burgeoning monopoly control of Aussie commodities:
Rio Tinto Group, fending off a hostile $143B takeover bid from BHP Billiton Ltd., rose in Sydney trading after biggest shareholder Aluminum Corp. of China, or Chinalco, was given Australian approval to raise its stake.
Rio, which has about half its operations in Australia, rose 1.1 percent to A$122.30 at the 4:10 p.m. Sydney time close on the Australian stock exchange. Its London stock is trading 14 percent below the 6,000 pence a share price paid by Chinalco and Alcoa Inc. when they bought their 9 percent stake in February. BHP fell 0.4 percent to A$40.00.
Chinalco can raise its stake in London-based Rio, the world's third-largest mining company, to 11 percent after Australia's Federal Treasurer Wayne Swan said yesterday he had no objections to the transaction. Chinalco would have to reapply to further increase its stake and had agreed not to seek representation on Rio's board, Swan said. [Ownership without representation = protectionism?]
Chinalco was pleased it had been given approval to increase its stake ``should it choose to do so'', the Beijing-based company said in a statement yesterday.