The speculation in the mining sector seems unending at the moment. BHP Billiton shares have hit a new high on talk coming out of Australia that the Chinese are stakebuilding in the company.
The name in the frame is aluminium maker Chinalco, which has already built up a stake in BHP's bid target Rio Tinto, with a suggested price of around A$60 a share (£28). BHP's shares are now up 63p at £20.83, while Rio is 129p higher at £67.74.
This follows a suggestion yesterday that BHP might raise its all share bid for Rio from 3.4 shares to 3.8 shares for every Rio one. BHP yesterday seemed to hint it had not ruled out adding a cash element to the offer.
Analyst John Meyer at Fairfax said: "We have rarely seen so much rumour and speculation on a takeover but we have never seen an offer of this scale in the mining industry. The result is to push Rio Tinto shares higher for now but investors should remember that this could be short lived. BHP's stock could fall on a raised bid and this in turn might drag Rio Tinto's shares lower."
