Common Ties May Give BHP Billiton Options While Pursuing Rio Tinto

(NewsVisual, powered by IntellectSpace) -- Rio Tinto (NYSE: RTP) may have rejected BHP Billiton’s (Public, LON: BLT) initial takeover bid, but that doesn’t mean that the deal is dead.

Advisors for Rio have reportedly suggested that BHP could actually stand to increase its share offer for the coveted mining company by at least 42 percent, bringing the value of the deal up to a staggering $157 billion. Whether BHP would actually be willing to pay this hefty sum has yet to be seen.

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 Directors at either company. The results suggest that BHP may need more than connections to secure Rio.

After quickly generating an IntellectSpace Knowledge Map, we found that numerous former Directors and Executives at BHP and Rio are connected though many 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 number of relationships that could have come into play in motivating BHP to pursue a deal.

As illustrated in this Knowledge Map, two of BHP’s current Directors can each be linked to certain key people that used to lead Rio's Board. BHP Director David Crawford currently serves as a Director at Westpac Banking Corporation, where he likely knew former Rio 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, 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 to accept BHP’s initial offer, the ties may serve well to facilitate the transition if an agreement is eventually reached. Since BHP may be less than willing to part with $157 billion for Rio, the company may do well to take advantage of whatever tools it has, executive relationships included, with help in finally securing a deal.

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

See article from The New York Times DealBook