“I think [a takeover] is highly unlikely,” ABN Amro mining analyst Warren Edney told MiningNews.net.

“For instance if it was a joint bid, you think about what each party would want.

“Each party would want the iron ore business of Rio Tinto, and BHP is unlikely to want CVRD to not only control the global [iron ore] market as well as the largest proportion of iron ore sold out of Australia.

“So I would of thought from a strategic perspective it wouldn’t be in BHP’s best interests to let CVRD do that.”

Edney said Brazil-based CVRD probably wouldn’t want BHP to control all of Rio’s iron ore production either.

“So I think that would be a bit of a stumbling block in terms of what they want to do,” he said.

A view echoed by Fat Prophets analyst Gavin Wendt who said it was more likely BHP or CVRD would go it alone in a takeover bid for Rio rather than teaming up and sharing the spoils.

"I would find it intriguing, if they were to launch a successful bid for Rio, how the assets would be divided up because I would imagine those companies would be interested in acquiring Rio for the same reasons and the same assets," he said.

Wendt said one of the major attractions of acquiring Rio, other than for its iron ore business, would be for its aluminium business assuming the Alcan bid goes ahead.

"BHP already has an established aluminium business," he said.

"CVRD I know would like to have one... so who would get the aluminium business? You couldn’t divide it into two... it wouldn’t make any sense."

Both BHP and CVRD have declined to comment on the takeover rumours.

“We don’t comment on market rumours and speculation,” a BHP spokesperson told Dow Jones newswires.

The overnight speculation has seen Rio’s share price gain $3.30 to hit an intraday high of $99 this morning.

Yesterday, analysts at GoldmanSachsJBWere said it preferred BHP to Rio, citing Rio’s acquisition of Alcan and its cost performance as potential risks in the future.

At midday, Rio was trading at $98.34, while BHP had dipped 21c to $38.23.