8 November
London,
Dow Jones

LONDON -(Dow Jones)- Mining company Rio Tinto PLC (RIO.LN) is being advised by Credit Suisse Group (CS), JP Morgan Cazenove Ltd., Macquarie Bank Ltd. (MBL.AU), Morgan Stanley (MS) and NM Rothschild, people familiar with the matter told Dow Jones Newswires on Thursday.

Earlier, rival miner BHP Billiton PLC (BLT.LN) confirmed it had approached Rio Tinto in a transaction that deal tracker Dealogic PLC (DL.LN) said was worth $113 billion.

At that size, the deal would exceed the $95 billion takeover of Dutch bank ABN Amro Holding NV (ABN), the largest M&A deal so far this year. It would also rank as the second-largest M&A deal on record after Vodafone Group PLC (VOD) acquired Mannesmann AG in a deal worth $172 billion in 1999.

Rio Tinto has rejected the offer on the grounds that it undervalues the company. But BHP said it intends to continue to seek an opportunity to meet and discuss its proposal with its reluctant target.

Some people familiar said that banks are still fighting to secure their place as advisers to BHP Billiton. But others said that Goldman Sachs Group Inc. (GS), Gresham Investment House and BHP’s broker Merrill Lynch & Co (MER) were on course to win roles on this side of the deal.

Royal Bank of Scotland Group PLC (RBS.LN), Banco Santander SA (STD) of Spain and Belgian-Dutch bank Fortis NV (FORSY) sealed the acquisition of Dutch bank ABN on Oct. 8, beating a lower recommended offer from Barclays PLC (BCS).

JP Morgan has earned the most M&A revenue from global mining deals in the past five years, followed by Morgan Stanley, Citigroup Inc. © and UBS AG (UBS), Dealogic said. These banks earned $191 million, $178 million, $136 million and $130 million from the business, respectively, from 2002 to year-to-date 2007.

So far this year, JP Morgan has earned $67 million in M&A revenue from the mining sector, Morgan Stanley has earned $65 million and Merrill Lynch and Citigroup earned $52 million each.

BHP Billiton’s offer would eclipse Rio Tinto’s $43 billion offer in May for Canada’s Alcan (AL), the biggest deal involving a mining company to date. Deutsche Bank, Credit Suisse and CIBC World Markets advised Rio Tinto on that transaction.

Year to date, there have been 1,569 global deals involving mining companies. These were worth $149 billion collectively.