Rio Tinto CEO mum on PotashCorp bid

The head of Rio Tinto refused to comment Friday on whether the global mining company would make a competing bid for Potash Corporation of Saskatchewan.

Rio Tinto's CEO Tom Albanese played down speculation that the company would enter a bidding war for PotashCorp, one of the world's biggest fertilizer companies, calling it "commercial speculation."

But he did not completely rule out such a move when he told reporters at an industry conference in Shanghai that "if the right resource comes our way we will look at it."

Also Friday, PotashCorp urged shareholders not to tender shares into Australian mining conglomerate BHP Billiton's takeover offer until the board has reviewed the details.

"PotashCorp's board will make a recommendation to shareholders regarding the offer, but in the meantime, the PotashCorp board advises shareholders not to take any action regarding the offer," it said in a statement filed with the U.S. Securities and Exchange Commission.

Earlier this week, PotashCorp rejected the bid from the world's largest mining company, as "grossly inadequate."

The all-cash bid by BHP Billiton is worth about $38.6 billion US, or $130 per share.

Among the companies considered possible suitors for PotashCorp are; Vale SA, which swallowed up Canadian metals miner Inco Ltd. a few years ago; Sinochem; Canada's Teck Resources; and London-based Rio Tinto, which acquired Alcan Inc. of Montreal in 2007.

Since the BHP offer was made public Tuesday, the Canadian company's share price has climbed on belief that BHP would have to sweeten the offer to discourage other bids. PotashCorp's shares closed Thursday at $148.84 US on the New York Stock Exchange, well above the $130-a-share offer.

Analysts doubt that BHP's offer is enough to win the company that produces potash from six mines in Saskatchewan and one mine in New Brunswick and has a market capitalization of about $33 billion US.

Analysts peg the taking price in the range of $165 and $180 US per share.

"PotashCorp is a scarce value company. You have to pay replacement costs and you have to pay for the market share and you have to pay for the scarcity of the value," said Terry Ortslan of TSO and Associates in Montreal, who did not estimate a price.

"You don't build these kinds of companies overnight, so you have to pay for a premium for that."