Rio Tinto and BHP Billiton remained in the spotlight today after RIO formally notified shareholders that it had rejected BHP's $350 billion bid.
In a statement on Monday BHP argued that its offer represents a premium of 28 percent to the combined market value of Rio Tinto shares in the three months to October 31.
Peter Costello jumped in on the action too, commenting that BHP would have to clear competition hurdles and be consistent with the federal government's foreign investment policy if it pursued a bid for Rio Tinto.
Mr Costello said the federal government's foreign investment policy would require BHP to have its headquarters in Australia.
"That is a condition I put in place," he said.'
BHP has already targeted Melbourne as a potential new headquarters for the combined group if the merger were to go ahead.
The Minister refused to answer questions regarding the competition concerns about the potential merger of the two resources giants.
"That would have to be assessed."
BHP said yesterday that it was planning to meet the major shareholders of Rio Tinto as early as this week to explain the "irresistible logic" of the offer.
CEO of BHP Marius Kloppers suggested that if Rio continued to hold out on the offer, BHP may commence a hostile takeover bid.
"Our sole objective is to tell people about this unique value proposition and get Rio Tinto to engage."
"What other things eventually are down the road I just wouldn't care to speculate today."
BHP fell by 0.1% or 4 cents to close at $41.66.
Rio Tinto was also down, falling by 0.5% or 72 cents to close the day at $139.
