Rio Tinto to acquire remainder of Turquoise Hill Resources

Mining giant Rio Tinto has entered into a binding agreement to acquire all of the remaining shares of Turquoise Hill Resources that it does not currently own.

Rio Tinto said on Tuesday that Turquoise Hill's directors had unanimously recommended that minority shareholders vote in favour of the transaction and have already agreed to sell their own stakes.

The FTSE 100-listed group stated the transaction would deliver "significant value" to Turquoise Hill's minority shareholders, with the certainty of an all-cash offer of CAD $43.0 (£28.30) per share - a premium of 67% to Turquoise Hill's closing price of CAD $25.68 (£16.90) on 11 March.

Rio Tinto has also agreed to provide Turquoise Hill, which operates the Oyu Tolgoi open pit and underground mining project in Mongolia, with secured short-term liquidity during the transaction period of up to USD $1.1bn, which will need to be repaid from an equity raising from shareholders in the first half of 2023 if the transaction fails to receive shareholder approval.

Turquoise Hill estimated that it will require USD $3.6bn in additional funding to complete the project, which it aims to address through a funding plan - including renegotiating debt repayment dates.

Reporting by Iain Gilbert at Sharecast.com