Rio Tinto's chiefs hit paydirt in BHP offer

The bill for paying off Rio Tinto directors in a takeover would run to tens of millions of pounds, according to the latest report and accounts of the miner.

Tom Albanese, who has been chief executive for just six months, could expect approaching £2 million to pay off his 12-month rolling contract.

But Albanese, 49, would score best on his shareholdings and options after the Rio Tinto stock price soared through £50 a share.

The accounts reveal that not only does he have an ordinary shareholding in Rio stock worth around £2.4 million and long-term investment plan holdings which could be worth £5 million but also a whole tranche of share options worth, at current prices, in excess of £20 million.

Albanese has four tranches of options on more than 100,000 shares priced in a range of between 1263p and 1458p. Rio shares were today up 173p at 5469p.

Guy Elliott, the 51-year-old finance director who is a Brit, can expect a multimillion pound payoff on his contract while his holdings and exercisable share options are worth in excess of £11 million.

Other big winners among Rio directors include senior executive Preston Chiaro, whose holdings and options are worth more than £7 million.

A takeover which it appears could get messy after Rio's rebuff yesterday will also be a bonanza for the group's advisers. BHP Billiton has appointed Goldman Sachs and the Australian corporate finance boutique Gresham Partners to advise on the deal while Merrill Lynch is its broker.

Rio is already being advised by Rothschild, Credit Suisse and JP Morgan while Aussie bank Macquarie and Morgan Stanley are also believed to have been brought in to help.

BHP executives today entered crunch meetings to thrash out their next move in their bid for Rio with a cash sweetener high on the list of options. The merger on the table would create a titan, not only of the mining industry, but of the global economy and would be the biggest deal in corporate history.

Rio has rejected an all-paper offer from BHP of three BHP shares for every Rio share.

Analysts believe Rio shareholders would force the directors, led by chairman Paul Skinner, back to the table, however, if BHP was to sweeten its bid with a cash offer on top of the stock swap.

Rio directors rejected a BHP approach believed to have been made at the weekend.

If a deal goes through, the enlarged company would be the world's fourth largest, outranking Microsoft.

But BHP may have to dig deep before Rio can be swayed.

Rio has told BHP that the current deal on the table does not take into account the company's prospects as the China boom shows no signs of slowing.

Rio says that BHP's proposed bid "significantly undervalues Rio Tinto and its prospects".