BHP Billiton has made a long-awaited bid approach to Rio Tinto in a move aimed at creating a new mining giant, but Rio rejected the all-share proposal as too low.
Rio shares leapt as much as 30% in London after it said BHP had proposed offering three of its shares for every one Rio share - worth about $140 billion at current prices.
That would make it the world's second-biggest takeover deal after mobile phone giant Vodafone's purchase of Mannesmann in 2000 and would create a $360 billion company - roughly the same size as US computing giant Microsoft.
'The boards of Rio Tinto have given the proposal careful consideration and concluded that it significantly undervalues Rio Tinto and its prospects,' Rio, the world's third-biggest miner, said in a statement.
BHP, already the world's biggest miner, was undeterred at Rio's rejection, saying it would seek an opportunity to discuss its plans with Rio Tinto.
