Aussie Stocks Higher After Big Merger Bid

The Australian share market surged ahead Friday after a mammoth $252.14 billion takeover bid by BHP Billiton for its major rival Rio Tinto.

Rio Tinto rejected the offer but its share price rose more than 15 percent to $121.77 as investors jumped into the market in the hopes of a bidding war.

The price of BHP Billiton stock, however, slid 71 cents to $39.44.

Overall, stock indexes were up about 1 percent and the All Ordinaries Index gained 38.9 points to 6,607.4 and the ASX 200 rose 24.1 points to 6,545.7.

The takeover proposal, which would create the world’s biggest iron ore producer with a total of $406 billion, boosted other mining stocks by as much as 13 percent.

Oil and gas producer Woodside Petroleum was also up $1.42 to $51.28.

National Australia Bank rose more than $1 after announcing a record profit of more than $4 billion but other banks retreated.

A barrel of West Texas crude oil fetched $95.51 and spot gold sold at $834 an ounce.

The Australian dollar slipped slightly to 92.77 U.S. cents, 43 British pence, 104 Japanese yen and 62 euro cents.