** BHP Billiton’s bid for Rio Tinto may be just the first shot in a battle that could draw in other parties and push up the bidding above $170 billion.

Rio’s rejection of a $140 billion all-share offer from BHP is likely to trigger rival bids from resource companies awash with cash from record commodity and stock prices.

A marriage between BHP and Rio would create the world’s biggest mining force, capable of controlling the global flow of fleet loads of iron ore, copper, coal and other commodities for industrial use.

** The $6.3 billion leveraged buyout of Manor Care faces a major hurdle as Wall Street dealers struggle to sell bonds in the $850 billion commercial mortgage bond market. 
 
Real estate underlying the nursing home operator, which helped justify Carlyle’s rich July offer, now has lenders balking at parts of the deal. Probably not helping matters is news that the deal in under increased regulatory scrutiny. 

** With lending markets tight and banks saddled with the fallout from mortgage losses, the U.S. merger market could drop by as much as 20 percent in 2008 while Europe may see a 5 percent to 10 percent decline in volume.
    
While the market may see several small leverage buyout deals of about $1 billion to $3 billion in size, it may take several quarters before private equity buyers return to buyouts of more than $10 billion.

** Singapore Airlines and Temasek Holdings, eager to tap China’s rapidly growing aviation market, agreed to buy a 24 percent stake in China Eastern Airlines HK$7.16 billion ($921 million), China Eastern.
 
The agreement seals a deal announced on September and marks the first purchase of a major, strategic stake in one of China’s big airlines, which are keen to expand their global networks.

(Image: Rio Tinto’s Northparkes copper-gold mine in Central West New South Wales. Reuters file.)