BHP Doesn't Know How Woodside Rumor Started

BHP Billiton (NYSE: BHP), the world's largest mining company, is saying it has no knowledge of how speculation regarding the company mulling a $48.5 billion takeover of Woodside Petroleum (PK: WOPEY), Australia's second-largest oil and natural gas producer, started.

Speculation has intensified in recent weeks that BHP was preparing to make a move on Woodside and several press outlets reported on Sunday that BHP was in fact preparing to make a $48.5 billion offer. BHP said the market is aware of all material information pertaining to the company.

The Sunday Times reported that BHP is in talks to buy Royal Dutch Shell's (NYSE: RDS-A) 24% stake in Woodside and then would mount a full takeover bid after that purchase. Shell, Europe's largest oil company, has said it is no hurry to part with its Woodside stake while the Australian reported the company could play "hardball" with BHP about selling the Woodside stake.

BHP would swap Woodside assets, including its Sunrise gas field, in return for Shell's stake, MarketWatch reported, citing the Sunday Times.

Woodside did not comment on the rumors.