Sources say Glencore is close to appointing Citi for merger talks with Rio Tinto as a consultant.

Two people familiar with the matter said that the Swiss miner Glencore was close to appointing Citi as its "lead investment banking firm" for its potential acquisition of Rio Tinto, which could result in the creation of the world's biggest miner worth over $200 billion.

Citigroup Global Markets Inc. filed a disclosure with the UK Takeover Panel on January that identified itself as being connected to Glencore Plc, in relation to an possible deal with Rio Tinto, according to filings at the London Stock Exchange.

Both the bank and Glencore declined to comment.

Citi has had a longstanding relationship with Glencore. It advised the miner/trader in several major transactions including its initial public offering of 2011 and, most recently, on the purchase of the coal business at?Teck Resources.

The markets have long anticipated that Glencore and Rio Tinto, who announced on January 8th, they were in preliminary merger talks, would seek to extend their current deadline for an upcoming bid due to the complexity and scale of the potential deal.

According to UK takeover regulations, a bidder who has been identified for a bid has 28 days to announce his or her intention to submit an offer. The current deadline expires on?Feb 5, but the parties can request an extension. Sources said that other investment banks were vying to be involved in the advisory role for the deal. They did not name them. Rio Tinto has appointed 'JP Morgan, Evercore, and Macquarie as advisors on the deal, according people familiar with this development. This was reported earlier in the month. Bankers are vying for advisory roles on deals of this size, as they compete to earn a portion of the advisory fees that could be more than $100,000,000. (Reporting from Divyarajagopal in Toronto, and Clara Denina at London; editing by Emelia Sithole Matarise).

(source: Reuters)