LONDON, UK: Rio Tinto has made a non-binding proposal to the Turquoise Hill Board to acquire the roughly 49% of the issued and excellent shares of Turquoise Hill that Rio Tinto doesn’t currently own.
Under the phrases of the Proposed Transaction, Turquoise Hill minority shareholders would obtain C$34 in money per Turquoise Hill share, representing a premium of 32% to Turquoise Hill’s final closing share price on the Toronto Stock Exchange. This proposal would worth the Turquoise Hill minority share capital at roughly US$2.7 billion.
The Proposed Transaction follows the recent complete settlement reached between Rio Tinto, Turquoise Hill and the Government of Mongolia to maneuver the Oyu Tolgoi project forward, reset the connection between the companions and approve graduation of underground operations.
It would simplify the Oyu Tolgoi possession structure, strengthen Rio Tinto’s copper portfolio, and reinforce its long-term dedication to Mongolia. In addition, the Proposed Transaction provides Turquoise Hill minority shareholders with the ability to realise compelling, immediate and sure worth for his or her shares at a time when uncertainties inherent within the event of the underground operations and funding of such development remain.
Rio Tinto Chief Executive Jakob Stausholm said “Rio Tinto strongly believes within the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we wish to extend our curiosity in Oyu Tolgoi, simplify the possession structure, and additional strengthen Rio Tinto’s copper portfolio. We believe the phrases of proposal are compelling for Turquoise Hill shareholders.
“The Proposed Transaction would allow Rio Tinto to work directly with the Government of Mongolia to maneuver the Oyu Tolgoi project ahead with a simpler and extra environment friendly possession and governance structure. With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term dedication to Mongolia.”
Rio Tinto looks ahead to working constructively with the Turquoise Hill Board to progress the Proposed Transaction. Should Turquoise Hill investors not settle for the Proposed Transaction, Rio Tinto welcomes their continued funding and equal share of future dangers and funding obligations.
Rio Tinto’s proposal to the Turquoise Hill Board will be filed promptly with the Securities and Exchange Commission in accordance with relevant legal guidelines and regulations within the United States. The Proposed Transaction, which is anticipated to be conducted by way of a Canadian plan of arrangement, will be topic to customary closing conditions, together with approval by a majority of the votes cast by Turquoise Hill minority shareholders. The Proposed Transaction is not topic to any financing situation or due diligence.
No settlement has been reached between Rio Tinto and Turquoise Hill, and there can be no assurance that any transaction will result from these discussions. Even if a transaction is agreed, there can be no assurances as to its terms, construction or timing.
Credit Suisse, RBC Capital Markets and Rothschild & Co are acting as monetary advisors to Rio Tinto, and McCarthy Tétrault LLP and Sullivan & Cromwell LLP are acting as authorized advisors. Rio Tinto and its advisors stand prepared to work with the Turquoise Hill Board of Directors to agree to the phrases of, and implement, the Proposed Transaction.
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