Rio Tinto is reviving after an earlier fall, with traders hoping for a higher offer from predator BHP Billiton.
Rio was weaker first thing on reports - emanating from the Wall Street Journal - that it would consider a so-called Pac-Man defence against the rejected offer from BHP. In other words, it would mount a counter bid for BHP despite being much smaller.
Sources close to Rio dismissed the idea as laughable, given the relative scales of the two companies, which is fair enough. More plausible is the idea that BHP might increase its terms, either by adding some cash into the mix or raising the number of shares being offered from three BHP shares for each Rio share to 3.5.
Meanwhile, Rio has an update scheduled for November 26, when it is likely to put some flesh on the bones of its rejection of the BHP move.
Rio shares are now 89p higher at £55.09, while BHP is up 13p to £16.11.
Elsewhere, the FTSE 100 is off its worst levels but still down 25.7 points at 6333.9, with no sign of a recovery at Alliance & Leicester, down 5%.
Among the small fry, there must be some burned fingers in Earthport, the electronic payments company. Earlier this week, the shares were pushed up to 58p on talk a Dubai investor may be stakebuilding. Today the company announced details of a loan note, which is convertible at 31p a share, and also issued around 1 million new shares at 31.5p to satisfy investors exercising warrants. The shares lost 5.5p to 49p.
