BHP Billiton is unlikely to increase its $130 billion unsolicited proposal to acquire mining rival Rio Tinto by a Feb 6 deadline, The Wall Street Journal reported.

BHP could be trying to pressure Rio to negotiate by holding firm with its three-for-one share offer, which has yet to be formalized, the newspaper reported , citing sources familiar with the company's plans.

But with stock prices for both companies spiraling down in step with a general rout across equities markets, such a strategy could backfire, analysts said.

BHP's Australian shares tumbled nearly 6 percent yesterday, while Rio was down more than 10 percent, outpacing losses of about 5 percent in Australia's benchmark S&P/ASX 200 index.

After Rio's sharp slide, DJ Carmichael & Co mining analyst James Wilson said BHP could be seen as adopting an opportunistic stance if they opt to proceed with their original proposal.

Speculation had swirled on Friday that BHP was preparing a sweetened offer of 3.58 of its shares, plus A$16.50.

BHP has refused to comment on the Wall Street Journal report or on market speculation.

Agencies

(China Daily 01/23/2008 page16)