Rio Tinto has revealed it rejected a takeover bid from rival Glencore in August.
The Anglo-Australian mining group explained that the decision was taken as it was "not in the best interest" of its shareholders. Rio Tinto said in a statement that no discussions were taking place between the two companies and that a rejection of the offer was delivered to Glencore in early August. It added that since then there has been no further communication between the two.
Had the deal been approved it would have created the largest publicly listed mining group. However, after Rio Tinto's rejection it has grown in size and now boast a market capitalisation of around £56.3 billion compared with Glencore's £44.5 billion. It also saw shares open on the New York Stock Exchange 5.49 per cent up at 3161.50p as of 08:54 BST on Tuesday (October 7th).
Rio Tinto's recent success has been placed on the company's bid to execute its strategy. Its ongoing operations ensure that it is confident it will be able to deliver significant and sustainable value for its shareholders.
Jan du Plessis, Rio Tinto chairman, said in the company statement: "The board believes that the continued successful execution of Rio Tinto's strategy will allow Rio Tinto to increase free cash flow significantly in the near term and materially increase returns to shareholders.
"Rio Tinto's shareholders stand to benefit from the very considerable value that this will generate."
The Anglo-Australian mining firm has been expanding its operations in recent months. It announced in May that, along with Chinalco and the International Finance Corporation, it had secured a deal to develop Guinea's iron ore deposits. The $20 billion (£12 billion) "investment framework" allows the provision of legal and financial backing to the Simandou project.
Once ratified a feasibility study could be completed within a year.
Find up to date information on the FTSE 100 and spread betting strategies at City Index