The chairman of mining company Rio Tinto wrote to shareholders on Sunday, urging them to take no action on a bid for the company by rival miner BHP Billiton.
"The Rio boards unanimously rejected this proposal because it significantly undervalued Rio Tinto and its prospects," Paul Skinner said in a letter to shareholders.
BHP's revised offer for Rio, worth around $147 billion when it was launched last week, would be the mining sector's biggest ever deal and would create the world's third-biggest company after ExxonMobil and General Electric (GE is the parent company of CNBC).
But Rio last week rejected BHP's sweetened offer of 3.4 shares for each Rio share offer, a 13 percent improvement on its initial informal approach in November.
Skinner said shareholders should take no action if contacted by BHP Billiton about the offer.
"BHP Billiton's announcement is not a firm offer for your shares or ADRs," he said in his letter to shareholders. "There is currently no formal offer for you to consider. You do not need to take any action."
Asian and European customers of both companies, particularly steel mills in China and Japan that buy hundreds of millions of tons of iron ore each year, have raised concerns about the clout a merged BHP/Rio would have on the price of raw materials.
BHP/Rio would control more than a third of the world's iron ore, a quarter of the uranium and millions of tons of copper, aluminum and coal, as well as gold, silver and diamonds.