Rio CEO points to BHP undervaluing growth
Rio Tinto’s (RIO.L: Quote, Profile, Research) (RIO.AX: Quote, Profile, Research) portfolio of growth projects will drive its shares up faster than those of its rival BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research), Rio Chief Executive Tom Albanese said on Thursday, undermining the case for BHP’s all-stock hostile takeover offer.
“As time goes on, our value relative to BHP’s value will only go up,” Albanese told Reuters in an interview on the sidelines of the Credit Suisse Asian Investment Conference in Hong Kong.
BHP last week challenged Rio to explain why it thought the offer of 3.4 BHP shares for each of Rio’s was too low, beyond rejecting it bluntly as “ballparks” away from Rio’s true value.
Albanese declined to put a figure on Rio’s fair value. “It just goes up over time,” he said.
But he added that it was important that both firms gave the market a transparent picture of their projects, in terms of value and capital costs faxless payday loans. Rio has presented a good deal of information to show its own strong growth prospects, Albanese said.
“We’ve had a very strong year in 2007, with earnings that had been increasing over the course of 2007, second-half earnings and EBITDA being stronger than the first half.
“We’ve talked about our long-term growth prospects, not only in aggregate, with an 8 percent aggregate cumulative growth on a year-by-year basis to 2015, but also in the context of individual projects.”
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