Rio Tinto Shares Soar, BHP Billiton Supported Early On ASX

SYDNEY -(Dow Jones)- Shares in Rio Tinto PLC (RTP) soared Friday on the Australian share market, matching a move in London as market participants speculated that BHP Billiton PLC (BHP) could make a sweeter offer for Rio.

BHP opened weaker but quickly turned positive as traders view BHP’s actions as positive.

Despite Rio’s rejection of BHP’s 3-for-1 share offer, the share price gains indicate that investors expect BHP to continue its pursuit of Rio or that another bidder will emerge.

At 2310 GMT, BHP was up 0.2% at A$43.34 and Rio Tinto was up 19% at A$134.96.

BHP said after the Australian market closed Thursday that it had approached rival miner Rio in a deal that could be worth more than $100 billion.

In London, Rio’s share price jumped 22% and BHP’s fell 5.7%.

BHP Billiton said it had written twice to Rio and now "intends to continue to seek an opportunity to meet and discuss its proposal with Rio Tinto."

But Rio Tinto said the deal "significantly undervalues" the company.

Other miners that might be interested in Rio — Brazil’s Cia. Vale do Rio Doce (RIO), Anglo American PLC (AAL.LN) and Xstrata PLC (XTA.LN) — have all so far declined to comment.