Turquoise Hill minority shareholder ‘not interested’ in Rio Tinto’s $3.3 billion offer

FILE PHOTO: The Rio Tinto logo is displayed on a visitor’s helmet at a borate mine in Boron, California, U.S. November 15, 2019. REUTERS/Patrick T. Fallon/

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Sep 2 (Reuters) – A minority shareholder in Turquoise Hill Resources Ltd (TRQ.TO) said on Friday he did not support Rio Tinto’s (RIO.L), (RIO.AX) latest watered-down offer to buy the rest of the Canadian miner for 3.3 billion dollars.

Mining giant Rio Tinto, which owns a majority stake in Turquoise Hill, reached an agreement in principle on Thursday to buy a 49% stake in Turquoise Hill for C$43 per share. Read more

California-based SailingStone Capital Partners, which has a 2.16% stake in Turquoise Hill, said the cash offer for the stake did not “adequately compensate” minority shareholders for their economic interest in Oyu Tolgoi.

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The Oyu Tolgoi project, located south of the Mongolian capital Ulaanbaatar, is the largest known copper and gold deposit in the world.

The agreement to purchase the remaining stake in Turquoise Hill would give Rio Tinto a 66% stake in the Oyu Tolgoi project, with the remaining 34% held by the Mongolian government.

“Rio Tinto holds its stake in Turquoise Hill on Rio’s balance sheet at $41 per share, equivalent to C$56 per share at current exchange rates and a premium of more than 30% over the revised offer. “said SailingStone. (https://prn.to/3wPZTNQ)

“As large, long-term holders of Turquoise Hill, we are not interested in selling our stake at a massive discount to intrinsic value.”

Private investment firm Pentwater Capital Management, a shareholder of Turquoise Hill with a 10% stake, did not immediately respond to a Reuters request for comment on Rio Tinto’s latest bid.

Pentwater previously rejected Rio’s initial offer of C$34 per share made in mid-March. (https://reut.rs/3wPdN2A)

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Reporting by Sameer Manekar in Bengaluru; Editing by Shounak Dasgupta

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