BHP Billiton chief executive Marius Kloppers has acknowledged that some investors are ''sitting on the sideline'' while they await regulatory rulings on its takeover offer for Rio Tinto.
The comment came after the Australian Competition and Consumer Commission said on Friday that the world's biggest mining takeover might raise competition concerns in the global iron ore market.
Mr Kloppers accepted that iron ore presented the largest synergy opportunity from the proposed $163billion deal.
He declined to specify whether the deal would be worth doing if it could not merge the iron ore businesses.
''It's very hard to speculate on things that we don't think are going to happen and that are not the baseline that we are planning around,'' he said yesterday.
In a sign investors are less confident the bid will succeed, the ratio of the value of Rio Tinto shares to BHP Billiton shares fell this month to under three for the first time since the bid was launched.
BHP is offering 3.4 of its shares for each Rio Tinto share.
Mr Kloppers pinned the change in ratio on BHP's strong performance, but added that some investors were holding out for more information on antitrust rulings.
''I think it's a combination of how our commodities versus Rio's commodities have developed,'' he said. ''And I think it's fair to say that investors are still waiting, sitting on the sideline a little bit, to see how we clear our regulatory preconditions on this deal.''
European Union competition regulators said last month that their initial investigations had ''indicated that the proposed takeover raises serious doubts'' as to its compatibility with the global iron ore market.
A merger between BHP Billiton, the world's third-biggest producer of iron ore, and Rio Tinto, the second-biggest, would create an entity producing over one-third of the world's iron ore.
The commission said on Friday that a merged firm ''may have the ability and incentive to influence global supply and global prices for iron ore lump and fines''.
''Steel makers in Australia and overseas could face significantly higher prices for iron ore than BHP Billiton and Rio Tinto would achieve in the absence of the proposed acquisition,'' it said.
The commission has asked for further industry submissions by September 5 and will give a decision by October 1.
European, American and South African regulators are expected to make their decisions by the end of the calendar year.
Last month, US regulators gave partial approval to the deal.
BHP Billiton reported on August 18 a 14.7 per cent rise in annual profit to $US15.39 billion ($A17.8billion).
BHP's petroleum division the key differentiator between it and Rio Tinto was the second-largest earner for the group.
''I think our result showed that petroleum is a key part of the portfolio,'' Mr Kloppers said. AAP
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