Rio Tinto in $2.7bn offer for 49% of Turquoise Hill
Anglo-Australian miner Rio Tinto has made a $2.7bn bid to buy the 49% of Canada’s Turquoise Hill it doesn’t own as it looks to settle its relationship with the Mongolian government over the massive Oyu Tolgoi copper project.
Rio is offering 34 Canadian dollars in cash a share, a 32% premium to Turquoise Hill's last closing share price on the Toronto Stock Exchange.
It said the deal would enable Rio Tinto to work directly with the Mongolian government to move the project forward “with a simpler and more efficient ownership and governance structure”.
“With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia,” the company said on Monday.
It also provided Turquoise Hill minority shareholders “with the ability to realise compelling, immediate and certain value for their shares at a time when uncertainties inherent in the development of the underground operations and funding of such development remain”.
Rio is looking to start work on a long-delayed $6.9bn underground expansion of Oyu Tolgoi after reaching a deal in January that waives debt owed by the Mongolian government to the troubled project.