US-based SailingStone, which has a 2.2% stake in Turquoise Hill, said the “opportunistic” cash offer for the 49% of the shares it doesn’t already own well below Rio’s own valuation of the company.
According to the fund manager specializing in resources companies Rio’s bid of C$43 a share, was C$13 short of the minimum it would accept.
“Rio Tinto holds its interest in Turquoise Hill on the Rio balance sheet at $41 a share, the equivalent of C$56 a share at current exchange rates and a more than a 30% premium to the revised offer,” Sailingstone said in a statement. “This should be the bare minimum for any attempt at price discovery.”
Under the provisional agreement, two thirds of the remaining shareholders, including Rio Tinto, need to vote in favour of the deal. Additionally, more than 50% of minority shareholders must accept it.
Rio’s offer already has the unanimous support of Turquoise Hill’s special…
