UPDATE 2-INTERVIEW-BHP excludes cash from Rio bid-fund manager

(Adds later Meintjes comment on current proposal)

By Eric Onstad

JOHANNESBURG, Nov 19 (Reuters) - BHP Billiton (BLT.L) Chief Executive Marius Kloppers has told investors the firm is not adding a cash sweetener to its current all-share takeover proposal for mining rival Rio Tinto (RIO.L), a South African BHP shareholder said on Monday.

"The whole idea is that they perceive that it is a script-for-script deal. He is quite insistent that no cash will enter into the picture," Liston Meintjes, chief investment officer at Metropolitan Asset Managers in Cape Town, told Reuters in an interview.

"They are definitely not going to put cash into it."

Meintjes said later that the reference to excluding cash related only to BHP's current proposal.

Kloppers was in South Africa last week to discuss BHP's (BHP.AX) takeover proposal for Rio (RIO.AX), worth as much as $140 billion, with shareholders of both companies.

Rio shares in London dipped as much 2.3 percent, but recovered along with other mining shares to trade down 1.3 percent at 5,313 pence by 1122 GMT. BHP shares in London were down 1.7 percent to 1,575 pence.

BHP does not want to offer cash partly because an all-share deal removes the risk that a commodities boom that has led to soaring metals prices may fizzle out, Meintjes said.