Two Deals Could Help BHP Billiton (BHP) Bag Rio Tinto (RTP)

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By Douglas A. McIntyre Published

At first, the offer by mining giant BHP Billiton (BHP) to buy Rio Tinto (RTP) looked improbable. The $140 billion price seemed quite rich and offering an all stock arrangement might not be attractive to the RTP board and shareholders.

BHP is moving quickly to remedy that. Citigroup (C) has lined up a $70 billion credit facility to help the takeover along, according to the FT.

A second play by BHP management could help finance a hostile run at Rio Tinto, if that is what is necessary to get a deal done. The Times of London is reporting that BHP is looking at selling its petroleum division for $40 billion. The paper writes "BHP’s financial advisers, Goldman Sachs and Citigroup, are understood to have already flown out to China to sound out potential bidders for the subsidiary."

Between the two initiatives, BHP most likely has the resources to make the takeover work. The Vegas odds are beginning to tip in its favor.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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