Mining News

Rio Tinto goes after Turquoise Hill in $2.7-billion bid

Rio Tinto (ASX, LON, NYSE: RIO) has offered $2.7 billion for the 49% of shares it doesn’t already own in Canada’s Turquoise Hill Resources (TSX, NYSE: TRQ) in a move that seeks gaining direct controlling ownership of the vast Oyu Tolgoi copper mine in Mongolia.

The world’s second largest miner is offering C$34 per each outstanding share of Turquoise Hill Resources it does not already own, a 32% premium to Friday closing price.

“Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term,” Rio Tinto chief executive Jakob Stausholm said in the statement. “That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio.”

The non-binding buyout proposal will now be considered by the Turquoise Hill board, excluding Rio Tinto’s nominees, before going to shareholder vote.

The offer comes only two months after Rio Tinto and the government of Mongolia reached an agreement to complete the underground development of the Oyu Tolgoi project in the Gobi Desert. That deal saw Rio agree to write off $2.4 billion of loans and interest used by Ulan Bator to fund its share of the development costs.

More to come

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