Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Merger or Acquisition (February 2008)
19 slides from Bhp's merger presentation, Feb 6, 2008
Slide 1: BHP Billiton Offer for Rio Tinto
For personal use only BHP Billiton Offer for Rio Tinto 6 February 2008 Marius Kloppers Chief Executive Officer Interim Results Slide 1 6 February 2008
Slide 2: Disclaimer
For personal use only Disclaimer This document has been prepared by BHP Billiton Ltd and BHP Billiton Plc (“ BHP Billiton") and comprises the written materials/slides for a presentation concerning BHP Billiton's offer for Rio Tinto Ltd and Rio Tinto plc (“ Rio Tinto” ). By reviewing/attending this p
Slide 3: Disclaimer (continued)
For personal use only Disclaimer (continued) None of the statements concerning ex pected cost savings, revenue benefits (and resulting incremental EBITDA) and EPS accretion in this presentation should be interpreted to mean that the future earnings per share of the enlarged B HP Billiton group for c
Slide 4: Background to the offer
Background to the offer • Early 2007: BHP Billiton discussed a merger of equals. This concept was rejected For personal use only by Rio Tinto • 1 November 2007: BHP Billiton made a confidential proposal to combine the companies. Rio Tinto rejected the proposal and refused to enter discussions • 8 No
Slide 5: BHP Billiton offer for Rio Tinto
BHP Billiton offer for Rio Tinto Rio Tinto plc Offer: For personal use only • Rio Tinto plc shareholders will receive 3.4 BHP Billiton shares for every Rio Tinto plc share held – 80% in BHP Billiton Plc shares With a “mix and match” facility – 20% in BHP Billiton Ltd shares • Separate US offer (whic
Slide 6: BHP Billiton offer for Rio Tinto
For personal use only BHP Billiton offer for Rio Tinto • Offers are inter-conditional • Subject to pre-conditions relating to certain anti-trust clearances in the EU, the US, Australia, Canada and South Africa and FIRB approval in Australia • Conditional on more than 50% acceptances in respect of pu
Slide 7: Unlocking value – Why a combination with Rio Tinto?
For personal use only Unlocking value – Why a combination with Rio Tinto? • Combined entity will have a unique portfolio of tier 1 assets – Enhanced ability to optimise and high-grade portfolio – Greater diversity and reduced value at risk – Combination makes sense in both a rising and a falling mar
Slide 8: Pre-approach the fair value share exchange ratio was 2.4:1
Pre-approach the fair value share exchange ratio was 2.4:1 Exchange ratio For personal use only Rio Tinto Rumours of Rio Tinto Rio Tinto offer BHP Billiton confirms 2006 results offer for Alcan for Alcan approach to Rio Tinto Board 3.5x 3.4 3.3x Rumours of a Rio Tinto 3.1x potential BHP Billiton bid
Slide 9: Change in Rio Tinto market capitalisation relative to index
Change in Rio Tinto market capitalisation relative to index Change in Rio Tinto market capitalisation relative to index(a)(b) For personal use only (US$bn) 60 8-Nov: 26-Nov: 12-Dec: 15-Jan: BHP Billiton Rio Tinto Investor BHP Billiton Investor Day one of Rio Tinto confirms approach 50 Presentation P
Slide 10: The background to our offer
For personal use only The background to our offer • All share consideration – relative value matters, not absolute value • BHP Billiton has outperformed Rio Tinto based on total shareholder return since the establishment of the BHP Billiton DLC • Prior to BHP Billiton’s approach on 1 November 2007 w
Slide 11: 3.4:1 is a compelling value uplift for Rio Tinto shareholders
For personal use only 3.4:1 is a compelling value uplift for Rio Tinto shareholders Relative market capitalisation(a) • SER = 3.4:1 up from 2.4:1(a) 46% • 44% of the combined company, up 44% from 36%(a) 44% • We believe that in the absence of our 42% offer this value uplift is simply not available t
Slide 12: 3.4:1 is a compelling value uplift for Rio Tinto shareholders
3.4:1 is a compelling value uplift for Rio Tinto shareholders Precedent mega cap resources all stock transactions For personal use only • 45% premium to the combined (Premium, %)(c) 45% volume weighted average market capitalisation(a) – 21% premium to the combined 32% market capitalisation based on
Slide 13: Transaction is value enhancing for BHP Billiton shareholders
For personal use only Transaction is value enhancing for BHP Billiton shareholders • Pro-rata exposure to post combination synergies – Quantified incremental EBITDA expected to grow to estimated US$3.7bn(a) per annum • Strengthened asset portfolio and future growth and growth options • Cash flow per
Slide 14: Regulatory approvals
For personal use only Regulatory approvals • Posting of offer documentation is subject to pre-conditions relating to certain anti-trust clearances in the EU, the US, Australia, Canada and South Africa and FIRB approval in Australia • Necessary regulatory reviews expected to be completed during the s
Slide 15: Superior production growth has delivered superior returns for shareholders
BHP Billiton – Superior production growth has delivered superior returns for shareholders Production growth(a) Market capitalisation(b) For personal use only (Index: FY2001 production = 100) (US$bn) BHP Billiton CAGR: 37% 240 US$230bn 170 210 160 BHP Billiton 8% CAGR 180 150 Rio Tinto 150 CAGR: 29%
Slide 16: Summary
Summary • BHP Billiton approached Rio Tinto on 1 November 2007 and considers that pre-approach For personal use only the companies’ market capitalisations demonstrated fair relative value • This fair value is represented by a SER of 2.4:1, with Rio Tinto shareholders entitled to 36% of the combinati
Slide 17: Appendix
For personal use only Appendix
Slide 18: Indicative timetable
For personal use only Indicative timetable Event Date Satisfaction of regulatory approval pre-conditions Second half of 2008 Posting of offer documents for Rio Tinto plc Offer and Day 0 Rio Tinto Ltd Offer to shareholders (Within 28 days after the pre-conditions are satisfied) Last date for fulfilme
Slide 19: For personal use only
For personal use only