BHP'S £3.8 billion bid trumps Xstrata in fight for WMC
Mar. 8--BHP Billiton blew rival Xstrata's chances of landing Australian mining group WMC Resources out of the water today, by agreeing a shock $7.3 billion (_-62__-93_3.8 billion) bid of its own.
Xstrata was forced to admit defeat in its four-month takeover battle, after WMC said it was recommending the A $7.83-a-share BHP deal unless a competing higher offer emerged.
WMC's shares were suspended last night at A$7.46 as it emerged that BHP was poised to enter the fray. Today, BHP Billiton chief executive Chip Goodyear said: "We are the best buyer for WMC. We can deliver more value than anyone else."
WMC has been fighting off Xstrata's hostile _-62__-93_3.2 billion bid since November and made it clear it was open to rival offers.
The war of words escalated last week when Xstrata chief executive Mick Davis -- who helped create BHP Billiton four years ago -- issued a take-it-or-leave-it ultimatum to WMC shareholders.
WMC has always maintained Xstrata's offer of A$7-a-share undervalued the company and its prospects. Xstrata argued that its target was using inflated calculations based on the current commodity boom.
Goodyear said BH's offer represented a "full and fair price". He added: "There has been a great deal of comment about the price for WMC given the current commodity cycle.
"An acquirer was always going to have to pay a fair price regardless of where we are in the commodity cycle."
Both Xstrata and BHP were attracted to WMC's uranium reserves -- it has almost 40 percent of the world's known deposits -- as well as its copper and nickel assets.
Xstrata's efforts sparked a nationalist campaign by politicians and mining industry executives, who said uranium assets should be kept in Australian hands, but its offer was cleared by the federal government last month.
If no rival bid emerges, BHP Billiton will be catapulted to the top of one sector it is weak in -- uranium -- and also make it the world's third-largest producer of nickel and second-largest producer of copper.
Rio Tinto was seen as a better bet for WMC, given its greater experience in the uranium sector.
But the group virtually ruled itself out of any bid last month, announcing that it would return $1.5 billion to shareholders through a series of buybacks.
In a short statement to the London Stock Exchange, Xstrata said it would not be increasing its unconditional offer.
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