The recommendation adds a twist in Rio’s efforts to gain greater control of Mongolia’s Oyu Tolgoi mine, which is expected to become the world’s fourth-largest copper mine, despite resistance from some of Turquoise Hill’s largest investors. Pentwater Capital Management and SailingStone Capital Partners, which combined hold about 14% of the Canadian miner, have said Rio’s offer undervalues the company.
Read more: Turquoise Hill’s fifth largest investor to reject Rio Tinto’s takeover bid
Glass Lewis said Turquoise Hill investors should vote for Rio’s offer because of the “relatively elevated risk profile” that would exist as a standalone company as well as its “significant near-term financing risks”.
“We are inclined to believe that Rio Tinto’s current offer represents a reasonable exit price and a compelling market premium for minority shareholders, on balance,” the firm said.
Rio already owns 51% of…
