BHP browsing, new bid for Rio doubtful

LONDON (Reuters) - Fresh speculation has swirled about mining giant BHP Billiton (BLT.L) resurrecting a takeover bid for rival Rio Tinto (RIO.L), but such a move is unlikely before Rio repairs its balance sheet. BHP (BHP.AX), which has the most robust balance sheet among major rivals, has previously said it was shopping for acquisitions to take advantage of low prices amid the downturn. But a move to revive a Rio (RIO.AX) bid four months after scrapping it would make little sense right now, said analysts, industry sources and fund managers. The world's largest mining company is probably sizing up other possible takeovers in areas such as potash and petroleum. "BHP is not going to go through this saga again now because they don't need to, the tables have turned," said a hedge fund manager who declined to be named. "Let Rio deal with the balance sheet first, and then come back and take them." BHP abandoned a hostile all-share bid in November, worth $66 billion at the time, citing Rio's heavy $39 billion debt load and the dire financial markets. Little has changed on those two issues since then. Rio has inked a $19.5 billion deal with Chinese state-owned Chinalco which would slash its debt load in half, but opposition is bubbling among large shareholders and Australian politicians. Australia's government is not due to make a decision until June, after which shareholders will get a chance to vote. Both BHP and Rio declined to comment on the speculation. "I'm sure they (BHP) are looking hard at Rio's portfolio and they're probably prepared to buy assets from Rio," said analyst Nick Hatch at ING. "There are also lots of other assets out there and companies that are having problems financing them, so I really don't see them taking on a huge, huge amount of debt with Rio." POTASH, PETROLEUM TAKEOVERS? UK takeover regulations ban BHP from making another hostile bid for Rio for 12 months after dropping the offer. A new deal approved by Rio's board would be allowed, but BHP would have to be careful not to violate the "anti-siege" aspect of the regulations that allow the target company respite from unwelcome advances for a year after a suitor drops a bid.