BHP Chairman:Will Continue To Seek Talks With Rio Tinto Board

SYDNEY -(Dow Jones)- BHP Billiton (BHP) will continue to seek talks with Rio Tinto (RTP) with the aim of merging the two groups, which it believes will benefit shareholders and customers, Chairman Don Argus said Wednesday.

"(The board) has sought and will continue to seek to engage in discussions with Rio Tinto with a view to obtaining the support and recommendation of its Board for this proposal," Argus told BHP’s Australian shareholders at its annual meeting in Adelaide.

Earlier this week, London-based Rio Tinto outlined a bullish outlook for its future as a single company including plans for a staggering increase in iron ore output to 600 million metric tons a year. Rio Tinto also revised up production forecasts for key growth projects as it pumped up its argument that BHP’s three-for-one share offer does not stack up.

Rio Tinto has repeatedly rejected BHP’s shares offer as undervaluing the company.

BHP Wednesday made no mention of altering its proposal.

"We agree that these two companies are very good companies on their own, they have already created a significant amount of value in the past and would continue to do so in the future," Argus said. "But the main point is that they are worth much more together than apart."

"This proposal makes strategic and economic sense for both our two companies and makes sense for our customers," Argus said.