Bhp Group Ltd · ASX:BHP
Bhp — RIO Tinto — Merger or Acquisition (February 2008)
20 slides from Bhp's merger presentation, Feb 6, 2008
Slide 1: Filed by BHP Billiton Pursuant to Rule 425
Filed by: BHP Billiton Plc and BHP Billiton Limited Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Rio Tinto Plc Commission File No.: 001-10533 The following are slides comprising an investor presentation that was given by Marius Kloppers, Chief Executive Officer, BHP Billito
Slide 2: BHP Billiton Offer for Rio Tinto
BHP Billiton Offer for Rio Tinto 6 February 2008 Marius Kloppers Chief Executive Officer
Slide 3: Disclaimer
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 presentation you agree to
Slide 4: Disclaimer (continued)
Disclaimer (continued) None of the statements concerning expected cost savings, revenue benefits (and resulting incremental EBITDA) and EPSaccretion in this presentation should be interpreted to mean that the future earnings per share of the enlarged BHP Billiton group for current and future financi
Slide 5: Background to the offer
Background to the offer • Early 2007: BHP Billiton discussed a merger of equals. This concept was rejected by Rio Tinto • 1 November 2007: BHP Billiton made a confidential proposal to combine the companies. Rio Tinto rejected the proposal and refused discussions to enter • 8 November 2007: BHP Billi
Slide 6: BHP Billiton offer for Rio Tinto
BHP Billiton offer for Rio Tinto Rio Tinto plc Offer: • 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 (which forms part of the Ri
Slide 7: BHP Billiton offer for Rio Tinto
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 publicly-held shares • S
Slide 8: Unlocking value – Why a combination with Rio Tinto?
Unlocking valueWhy – 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 market • Uniquely position
Slide 9: 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 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 1H 2007 Results 2.9x
Slide 10: Change in Rio Tinto market capitalisation relative to index
Change in Rio Tinto market capitalisation relative to index relativeto index(a)(b) ChangeinRioTintomarketcapitalisation (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 Presentation Pilbara media vi
Slide 11: The background to our offer
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 we believe Rio Tinto wa
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 (a) (a) Relativemarketcapitalisation • SER = 3.4:1 up from 2.4:1 46% • 44% of the combined company, up (a) 44% from 36% 44% • We believe that in the absence of our 42% offer this value uplift is simply not available to Rio Tinto sharehold
Slide 13: 3.4:1 is a compelling value uplift for Rio Tinto shareholders
3.4:1is a compelling value uplift for Rio Tinto shareholders Precedent mega cap resources all stock transactions • 45% premium to the combined (Premium, %) (c) 45% volume weighted average market (a) capitalisation – 21% premium to the combined 32% 30% market capitalisation basedMedian: on 27%(d) 25%
Slide 14: Transaction is value enhancing for BHP Billiton shareholders
Transaction is value enhancing for BHP Billiton shareholders • Pro-rata exposure to post combination synergies – Quantified incremental EBITDAexpectedtogrowtoestimated (a) perannum US$3.7B • Strengthened asset portfolio and future growth and growth options • Cashflowpershareaccretive (b) fromthefirs
Slide 15: Regulatory approvals
Regulatory approvals • Posting of offer documentation is subject to pre-conditions relating to certain anti-trust clearancesintheEU,theUS,Australia, CanadaandSouthAfricaandFIRBapprovalin Australia • Necessary regulatory reviewsexpectedtobecompleted duringthesecondhalfof2008 • Pre-notification discus
Slide 16: Superior production growth has delivered superior returns for shareholders
BHP BillitonSuperior – production growth has delivered superior returns for shareholders (a) (b) Production growth Marketcapitalisation (Index: FY2001 production = 100) (US$bn) BHP Billiton CAGR: 37% 240 US$230bn 170 210 160 BHP Billiton 8% CAGR 180 150 Rio Tinto 150 CAGR: 29% 140 US$122bn 120 130 R
Slide 17: Summary
Summary • BHP Billiton approached Rio Tinto on 1 November 2007 and considers that pre-approach the companies’ market capitalisations demonstrated fair relative value • Thisfairvalueis represented bya SERof2.4:1,withRioTintoshareholders entitledto (a) 36% of the combination • Since the date of the pr
Slide 18: Appendix
Appendix cdl bhpbilliton
Slide 19: Indicative timetable
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 fulfilment of minimum acceptan
Slide 20: sil
sil Ohpobilliton