Can Common Connections Between BHP Billiton and Rio Tinto Boost a Second Offer?

BHP Billiton, undiscouraged by Rio Tinto’s rejection of an initial takeover bid, has upped the ante as it is now prepared to offer more that $140 billion for the mining company. If accepted, the deal would be the largest of this year (see article from The Money Times). In order to determine if any significant relationships exist between BHP and Rio Tinto that could facilitate negotiations, we created an IntellectSpace Knowledge Map that visually maps the ties through the Executives and Board of Directors at either company. The results suggest that BHP may need more than connections to satisfy Rio Tinto.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

After quickly generating an IntellectSpace Knowledge Map, we found that numerous former Directors and Executives at BHP and Rio Tinto are connected though other corporate entities and organizations. By taking the analysis a step further and looking at the relationships that involve a current Director or Executive at either company, we identified a few sets of relationships that could have helped to motivate BHP into pursuing a deal. As shown in this Knowledge Map, two of BHP’s current Directors can each be linked to certain key people that used to lead Rio Tinto’s Board. BHP Director David Crawford currently serves as a Director at Westpac Banking Corporation, where he likely knew former Rio Tinto Deputy Chairman Leon A Davis (former Chairman of Westpac). The other notable relationship involves John Buchanan (Director at BHP) and Robert Wilson (former CEO/Chairman of Rio Tinto) through Boots Co, where they both previously served as Directors.

Given BHP’s ties to the former heads of Rio Tinto, it is possible that these relationships may have been valuable in the sharing of some important information and advice about a potential deal. Though common connections may not have been enough to convince Rio Tinto to accept BHP’s initial offer, the ties may serve well to facilitate the transition if an agreement is eventually reached.

Click here or copy this link into your Internet Explorer browser for an interactive version of this IntellectSpace Knowledge Map: http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=0ffc4bb4-c8f1-4e26-9789-06ed75696a5f