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Earlier this week, it felt like early August all over again, so grim was the news in the money markets. It still does but at least we now have two serious bid situations to cheer us up a bit.

After weeks of speculation, some might say years, BHP Billiton has finally pounced on Rio Tinto with an all-share offer that has been quickly rejected. Several people here are feeling a bit sick about it, having done well to get very, very close to the story last night and early this morning.

The deal is all about cutting costs, which have been rising, and strengthening the companies’ bargaining position with customers. This is especially so for iron ore, the sexy dirt of the moment, as my colleague in Australia, Peter Smith puts it. There will be competition issues, however. Rio shares are up 27 per cent. BHP shares are only off 1.5 per cent, which isn’t much under the circumstances.

What will Xstrata (up 8 per cent this morning) do? What does this mean for Rio’s acquisition of Alcan? Where would this leave Anglo American (up 9 per cent)? These are just some of the questions arising from today’s news.

The other bid is the one broken last night by our own Sarah Spikes and Neil Hume: the approach for Close Brothers. Andy Stewart’s Cenkos has teamed up with Landsbanki to try and buy the financial conglomerate chaired by Rod Kent. Close says the cash offer of 950p a share is too low even though its own shares were only at 760p this morning. Let’s see it prove it. Presumably it’ll try and rush its new FD, Jonathan Howell, over from the LSE a bit faster than planned.

Peter Meinertzhagen was right when he said at his retirement drinks the other night that, in the absence of debt, this would be the age of equity. BHP is offering paper and Andy Stewart is likely to issue it to raise cash for his Close move.

Otherwise, things seem to be coming together for Charles Dunstone at Carphone Warehouse, which published some quite good interim figures. Cashflow disappointed some though.

At BT, the costs of the reorganisation announced in April, together with higher interest charges on rising debt, weighed on second quarter profits. Later, we’ll want to compare how both BT and Carphone are doing in broadband.

Banks continue to be hammered in the market, so there may be more bad news to come. Overnight Morgan Stanley revealed that it got a big bet badly wrong and was hit by something called negative convexity, which is painful as it sounds. Barclays and RBS both off another 4 per cent.

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