In an announcement on the ASX last night, BHP Billiton backed away from its $100 billion hostile bid for reluctant suitor Rio Tinto. Rio shares tanked 40% in London and were down 30% at Noon on the ASX at $44.50, after hitting a low of $40.80. BHP shares were up 7.7% on the ASX, or more than $2 at $28.24. BHP chief Marius Kloppers reckons Rio’s $42 billion debt were too high to guarantee shareholder value. The commentariat largely concurred, with some colourful exceptions:

Alan Kohler, Business Spectator: “The idea was right, but the price was too high — by a factor of seven, as it turned out. The Rio board is now facing massive write-downs of the carrying of the Alcan assets and the millstone of $42 billion in debt that will now not be refinanced by Barclays et al as part of a BHP takeover.”

John Durie, The Australian: “In the end, BHP failed at the regulatory hurdle, which was bad luck but hardly unique, and it was lucky for BHP that it was able to package the loss in a much more palatable and arguably realistic view, that taking on Rio’s debt in today’s financial climate was too risky.”

Alan Jury, The Australian Financial Review: “It seems BHP has looked into the abyss exacerbated by the most recent extraordinary erosion of value and confidence in the world’s banks and major economies, with coincident savaging of commodity prices, and discovered a level of financial risk it isn’t prepared to tackle”

Terry McCrann, Herald Sun: “The board and senior management of BHP Billiton have shown extraordinary discipline. The board and senior management of Rio Tinto the reckless and now extremely painful opposite. The decision by BHP to walk away from the ‘once-in-a-century’ bid will clearly add value to Australia’s biggest company.”

Stephen Bartholomeusz, Business Spectator: “As China slowed, commodity prices plummeted and the oil price dived. As BHP and Rio Tinto’s share prices were smashed the appeal of the merger started to wane, rapidly and significantly. Perversely, the closer BHP got to succeeding, the less appealing success was looking … the one issue that would have loomed increasingly large in the minds of BHP’s directors would have been the $US42 billion of debt Rio into took on to acquire Alcan at the top of the pre-crisis market.”

Matthew Stevens, The Australian: “Kloppers abandoned his quest for mining’s $135 billion holy grail because the metrics of his plan had been undermined, potentially fatally, by a wicked combination of global financial crisis, the collapse of demand for his products and the growing financial vulnerability of his target. The rapid deterioration of raw materials market dynamics over the past six weeks left Kloppers increasingly fearful that he was betting the company on a successful deal.”

Rebecca Bream and Javier Blas, Financial Times: “For months Rio appeared to have the upper hand, wringing an increased offer from BHP in February, which was also rejected as too low. But Rio’s defence — predicated on booming demand for copper, aluminium and iron ore — started to crumble in May, when the markets began to grow nervous about the prospects of a world recession. Commodity prices started to cool, triggering a downward drift in mining share prices. Rio shares underperformed BHP’s shares and Rio shareholders started to put pressure on its management to accept a deal. Ultimately, however, the rapid market slump scotched BHP’s ability to consummate its takeover ambitions.”

Michael West, The Sydney Morning Herald: “BHP has capitulated to the inevitable. The costs of implementing such a leviathan global tie-up in a shrinking world economy would have been damaging. And if the deal really makes sense, BHP can always come back in a few months or a few years.”

Stephen Mayne, The Mayne Report: “We’ve had some big wins in our time but it’s hard to think of one that compares with BHP Billiton’s humiliating abandonment of its empire building $150 billion takeover bid for rival Rio Tinto. Today I can reveal that more than $7 billion worth of proxies backed my BHP board tilt, which was on the specific platform that BHP Billiton abandon the Rio assault and find a new chairman to replace Don Argus.”

Meanwhile at News.com.au, it appears that BHP is taking the failed bid out on a small rodent: