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BHP plays down speculation it plans to increase its Rio Tinto bid

THE chief executive of BHP Billiton today wouldn't rule out including a cash component in the company's bid for rival Rio Tinto.

However, BHP chief executive officer Marius Kloppers said the bid is worth more in an all-shares form and played down talk that the global miner plans to increase its offer anytime soon.

Asked in an interview with CNBC television if he would rule out having a cash portion to the bid, Kloppers was equivocal.

"We can't rule out anything,” Mr Kloppers told CNBC television. “All I can say is since we have made our bid, I think oil prices have moved up substantially, other commodity prices which we have in our portfolio have moved up substantially, and since we are paying with our scrip (shares), this means that the value of our offer is effectively increased."

Under the terms of its initial offer, BHP Billiton is offering 3.4 of its own shares for each Rio Tinto share.

Rio Tinto shares rallied in London trade amid market talk of a 3.8-for-1 shares offer from BHP Billiton. By late morning on wednesday, Rio’s Australian-listed shares were up 3.5 per cent at $149.49.

On the question of whether BHP would increase its bid, Mr Kloppers told CNBC that the group has "got quite a while to run on this bid".

"We are busy clearing all of our antitrust preconditions and it is our expectation that that is the immediate objective here," Mr Kloppers said.

"Given the massive movement in the energy commodities - we've got heavy exposure toward those - that means effectively that we are increasing the value of our company and increasing the value of our stock, and that should be very attractive to the Rio Tinto shareholders."

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