Major investors of giant mining firms BHP Billiton Ltd and Rio Tinto Ltd reportedly asked the two companies to prioritise share buyback schemes for now prior to launching plans of actively pursuing takeover deals.

In a report published by the Sunday Telegraph, institutional investors said that BHP and Rio Tinto were both notified through letters to convince boards of the firms to consider the idea of distributing cash to shareholders instead of investing again on expensive and uncertain acquisitions.

According to the London-based paper, investors initiated the move in light of recent speculations floated by analysts and investment bankers that new possible deals are being cooked up in the mining industry, with the giant companies emerging as possible major deal players.

The paper also reported that top investors hinted on both BHP and Rio Tinto that they are prepared to eject specific board members re-election bids should the two companies refuse to give their definite commitments on shareholders' requests.

The investors move came amidst twin deals currently in the works for the two companies, with BHP Billiton said to be eyeing BG Group for a merger deal while Rio Tinto's takeover proposal for Riversdale Mining Ltd almost a certainty as the board of the target company already recommended the deal to its shareholders.

Also, the possibility of a rival bid for the Africa-focused collier effectively fizzled out when Indian consortium ICVL dropped its considerations to introduce a better offer for the coal mining firm.

On the other hand, BHP Billiton seeking a major deal in the aftermath of its failed takeover proposal for Canadian firm Potash Corporation seemed to have caused considerable stir on the company's shareholders.

An unidentified key investor of BHP reportedly revealed that the Potash merger did not actually won the full approval of shareholders, who were wary of the deal's long-term costs and returns.

The same investor said that BHP should not focus too much on lining up targets for acquisitions and instead work on the possibility of share buybacks, stressing that "BHP is very under-leveraged and it's time to give some cash back."

On Rio Tinto's case, investors reportedly raised concerns that the Riversdale $3.9 billion takeover deal serves only as the start of a series of acquisitions planned by the global resource firm, a prospect that fails to attract enthusiasm from shareholders at this time.

Instead, a major Rio investor called on the miner to issue assurance that big deals would be set aside for now and strongly suggested that "the company could do a multibillion-pound share buyback, which we would prefer."