Rio Tinto eyeing up possible mega deal - report

Blue chip miner Rio Tinto is understood to be eyeing up a list of possible takeover targets, it was reported on Friday, including Canada’s Teck Resources.

According to Sky News, Rio is considering a number of deal options, one of which is a potential multi-billion dollar bid for Teck.

Citing unnamed sources, Sky said Rio had drawn up detailed proposals about a possible approach, including sounding out banks about financing. Teck would likely be valued at more than $30bn.

However, Rio - which is listed in both the UK and Australia - could face competition from other miners for Teck, which is now a pureplay metals miner after selling its coal division to Glencore for just under $7bn.

Any overseas bidder would also likely face push back from the Canadian authorities.

Earlier this year, rival miner BHP tried to take over Anglo American in a complex £39bn deal. That collapsed in May, but markets believe a similar mega deal within the sector could yet cross the line.

Both Rio Tinto and Teck declined to comment on the report.

As at 1100 BST, Rio’s London shares were largely unchanged at 5,256.69p, while New York-listed Teck was up 5% in pre-market trading.

Rio Tinto is due to publish second-quarter numbers next week, as are Chile’s Antofagasta and Anglo American.