So what's happening with takeover target Rio Tinto?
Friday saw rumours emerge of a possible bid with new terms of 3.5 BHP Billiton shares and $16 a share in cash and the weekend saw more reports in London of a new group of banks being put together by BHP to fund part of the original deal.
The Friday rumour emerged after the Rio share price sank under $A110 a share. It recovered to close around $A124. But the BHP share price was punished, it closed at $34.80 but that was a little higher than the low reached in the morning.
Based on BHP's closing price the suggested new terms would value RIO at $A137.80.
Rio's boss, Tom Albanese who has been briefing British, Australian and US media on the company's Australian (and especially WA iron ore business) over the past week, would not comment yesterday on the speculation of a new offer from BHP.
Rio's share price in London jumped nearly 5% on Friday after the speculation of a possible new offer emerged in the Australian market.
BHP has made an informal proposal of three of its shares for each Rio share, valuing the target around $US110 billion ($A126 billion). That has been rejected by Rio.
Analysts have said a revised offer might comprise 3.5 BHP Billiton shares for one Rio share, plus a cash component.
On December 21, the UK Takeovers Panel set a deadline of February 6 for BHP Billiton to announce its intention to make a firm and formal offer, or cease stalking Rio.
Rio chief executive Tom Albanese was asked on Sky News on Sunday if he expected a revised bid from BHP Billiton soon.
"I wouldn't comment on speculation. There's been an awful lot of speculation," Mr Albanese said.
"If the value's not there, it's not there. If it is there, it is there, but I wouldn't want to speculate."
Meanwhile the London Sunday Times website reported that BHP has called on seven global banks to provide the crucial $US70 billion needed to fund its planned merger with Rio.
The paper said Citigroup and Merrill Lynch were originally lined up to finance the audacious deal, but the squeeze on global credit markets has threatened to derail it.
BHP is reported to have drafted in Barclays, UBS, Goldman Sachs, HSBC, BNP Paribas and Santander banks to help finance the takeover and work alongside Citi. Merrill Lynch remains corporate broker to BHP but is no longer providing any financing. Some of these names were mentioned in earlier reports as being part of a consortium put together by BHP's advisers, so it is hard to see what's new.
The problem remains that cash for big takeovers remains in short supply given the credit crunch and turmoil in markets.
These banks would have to raise the cash from their own sources and then try and refinance it through selling new bonds: a big ask at the moment when there are more than $US300 billion on unwanted corporate bonds and finance deals on investment bank and other investor balance sheets at the moment.
It may change later in the year as conditions in credit markets improve, but that might take up to six months.
The cash is needed by BHP to refinance the $US38 billion loan Rio raised to buy Alcan. BHP has to refinance this facility within 45 days of the deal closing.
As well, financing facility will give BHP flexibility to execute a $US30 billion share buyback proposed as part of the deal to buy Rio or add a cash element to the current all-share offer.
"City sources have claimed BHP must raise this ratio closer to four to one. Sources close to the deal say bankers are working on a compromise of a ratio of 3.5 shares plus £6 per share of cash," The Times reported.
"If a bid materialises, it will have to conform to the rules of both the UK's Takeover Panel and Australia's Securities and Investments Commission. Their regulations differ markedly.
"But UK takeover rules specify a 60-day timetable for hostile bids. For BHP to proceed, it would need a special waiver from the Takeover Panel.
"In Australia, takeover offers can be left open while competition clearance is obtained. But SIC rules stipulate that offer documents must be posted to shareholders one month after a bid is announced, which BHP would like to avoid. Meanwhile, Companhia Vale do Rio has started due diligence on a potential bid for Xstrata."
