The quest for Rio Tinto (NYSE:RTP) becomes more and more curious by the day. Indeed, it's reached the point where it's difficult to know exactly what to believe in what's fast approaching saga status.
In the potential deal's latest iteration, Blackstone (NYSE:BX) has denied claims by London's Daily Telegraph that it would team up with China Investment Corp. to make a run at the big company. That purported combination would have followed hard on the heels of Australia's BHP Billiton (NYSE:BHP), which a month ago offered three of its own shares for each of Rio Tinto's. The target company's management has flatly and repeatedly turned that one down.
According to the Telegraph's disputed version, Blackstone's plan would be to acquire the big company before spinning off its iron ore operations and newly acquired aluminum producer Alcan. The paper said Blackstone believes the iron ore entity to be worth as much as $110 billion. Rio Tinto paid $37 billion in cash to snatch Alcan from the jaws of its Pittsburgh-based former sibling and suitor, Alcoa (NYSE:AA).
Clearly, much of the reason that Chinese interests continue to be linked with a Rio Tinto acquisition is concern in that country that supplies needed to fill its growing demand for iron ore could be compromised by an acquisition of the company. But no matter how you slice it, there appears to be a reasonable likelihood of some sort of deal involving Rio Tinto. In fact, prior to its own offer, it was rumored that BHP was planning a joint bid for Rio Tinto with Brazil's Vale (NYSE:RIO).
I've frequently preached to my Foolish friends about the significance of the global supply demand picture in energy. And while that picture is indeed important for us all, concern about the ultimate disposition of Rio Tinto indicates that there's a similar picture developing for a number of resources, certainly including iron ore.
On that basis alone, I urge Fools to keep a close eye on the resource companies mentioned above -- and I'd also include U.S. copper, molybdenum, and gold producer Freeport-McMoRan (NYSE:FCX). Those companies will have the challenging task of attempting to fill the world's voracious appetite for their products in the years to come.
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