Any possible takeover deal cannot occur for at least six months as Glencore confirmed this week it was no longer pursuing a Rio merger.

This move falls under Rule 2.8 of the UK’s Takeover Code – which prevents a party from making a takeover offer for six months after stating an intention not to make such an offer.

MPW is still expecting speculation to remain in place during the “cooling off period” and said it should be supportive of Rio’s valuation but could create a headwind for Glencore.

The broker, which has a neutral rating on Glencore shares, was sceptical of the possible rewards for Glencore on several fronts.

“We believe Rio would expect a substantial premium to entertain a merger with Glencore, including a cash component, which may make a deal for Glencore too rich to execute,” it said.

“Since bedding down the Xstrata merger, Glencore has spoken primarily of bolt-on acquisitions rather than transformational deals.

“While most Glencore investors would acknowledge the strategic virtues of merging with Rio, the simple question would likely remain – what is Glencore willing to pay to do so?

“Putting aside regulatory concerns – a deal would almost certainly receive scrutiny from China’s Ministry of Commerce and the European Union – we note that most Glencore investors have been attracted to Glencore for its glaring lack of exposure to the volatile iron ore market.”

The broker also estimated that Glencore could possibly bring about $US15 billion ($A16.9 billion) of balance sheet capacity to contribute as a cash component to any Rio deal.

“It remains uncertain whether this sum would be sufficient to lure Rio shareholders who likely stand to receive a cash return in February 2015 of $2.5 billion to $5 billion – depending on debt threshold assumptions – and a similar amount annually going forward.”