Glencore has abandoned plans to merge with Rio Tinto and create the world's largest miner for now, but pointedly reserved the right to take another shot.
The Anglo-Swiss commodities giant revealed it was not pursuing an estimated $US160 billion deal a day after the public revelations it had approached Rio.
Rio's shares fell by 98 cents, or nearly 1.6 per cent, to $59.09 on Glencore's statement after rising by 4.4 per cent on Tuesday.
Glencore said in a statement that in July it made an informal enquiry by telephone to Rio Tinto, to gauge its interest in a merger but was rebuffed.
"Glencore confirms that it is no longer actively considering any possible merger transaction with, or offer for the shares of, Rio Tinto," it said.
"Glencore however reserves its rights to make an offer in the future."
Glencore will be largely restricted from bidding again for six months due to UK takeover rules.
That was being viewed as a good thing that would give Glencore chief executive Ivan Glasenberg time to win over Rio shareholders and let the company continue to deal with a weak iron ore price.
Mr Glasenberg has publicly criticised Rio this year and is expected to make a pitch to its shareholders highlighting its dependence on iron ore and costly strategy of expanding supply which has driven down the price this year.
Glencore has a smaller market capitalisation than Rio's but Mr Glasenberg has successfully turned what was a small trading house into a major global resources group through deals including last year's $29 billion takeover of Xstrata.
The latest tilt has been viewed by many analysts as far more beneficial for Glencore and opportunistic given Rio's current weak share price.
While Rio shareholders are not expected to currently support a deal, CMC Markets chief market Michael McCarthy said the company would not want to add to its recent missteps that have soured its reputation.
Rio has written down the value of its $US38 billion Alcan aluminium takeover in 2009 by $US29 billion and sold the Mozambique coal assets it paid $3.9 billion for for just $US50 million.
In his response to news of the offer, Rio Tinto chairman Jan du Plessis reaffirmed the company's plans to return capital to shareholders.
"The board believes that the continued successful execution of Rio Tinto's strategy will allow Rio Tinto to increase free cash flow significantly in the near term and materially increase returns to shareholders," he said.
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