The world's biggest miner BHP Billiton said today it was dropping its hostile takeover bid for rival Rio Tinto amid the current financial crisis. The BHP chief executive Marius Kloppers said recent falls in commodity prices and other issues had altered the "risk dimensions" of the deal. BHP Billiton has been pursuing Rio Tinto for months in a multibillion-dollar deal that would create a massive resource company.
"BHP Billiton is very focused on balance-sheet strength," Mr Kloppers said. "Accordingly, the greater debt exposure of the combination plus the difficulty of divesting assets have increased the risks to shareholder value to an unacceptable level." The price of Rio Tinto shares Rio Tinto plunged by about 38 per cent in trading today after BHP's announcement. Rio Tinto stock slumped 38.78 per cent to 1,500 pence on London's FTSE 100 index of leading shares early today. BHP, meanwhile, jumped 16.53 percent to 1,142 pence on the same index. *Agencies