China teamed up with US aluminium producer Alcoa to buy a 12 per cent stake in Rio Tinto today and said it may make a bid.
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| A Rio Tinto mine in Huleva, Spain. |
The $14-billion-move by state-owned Aluminum Corp of China (Chinalco), China's biggest ever investment overseas, would threaten miner BHP Billiton's efforts to win Rio.
It comes days before a regulatory deadline on Wednesday for BHP to make a firm offer for Rio or to walk away.
Rio has rejected a all-share offer from BHP, worth about $123 billion at current prices, and analysts have long speculated that China might seek an influence as both companies' biggest customer.
Investment bank Lehman Brothers said it bought the stake in Rio for Chinalco and Alcoa at £60 a share, 21 per cent above Rio's closing price of £49.56 on Thursday.
Chinalco and Alcoa said they did not intend to make an offer for the whole of Rio, but reserved the right to do so if another party made a firm bid.
Rio shares leapt as much as 16 per cent to £57.49, while shares in Chinalco's unit, Aluminum Corp of China, jumped by more than 15 per cent. BHP shares also surged as much as 12 per cent.