Rio Tinto reiterates compelling value of proposal to acquire full ownership of Turquoise Hill
August 15 2022 - 6:29AM
Business Wire
Rio Tinto notes the Turquoise Hill announcement today indicating
that the Turquoise Hill Special Committee has terminated its review
of Rio Tinto’s non-binding proposal to acquire full ownership of
Turquoise Hill for C$34 in cash per Turquoise Hill share (the
“Proposed Transaction”).
Rio Tinto is disappointed by the decision of the Special
Committee and continues to believe that the terms of the Proposed
Transaction would deliver compelling value for Turquoise Hill
minority shareholders and provide the certainty of an all-cash
offer at an attractive premium of:
- 32% to Turquoise Hill’s closing price of C$25.68 per share on
11 March 2022; and
- 78% to Turquoise Hill’s closing price of C$19.12 per share on
24 January 2022, the day before agreeing a path forward between
Government of Mongolia, Turquoise Hill and Rio Tinto that enabled
commencement of the underground mine at Oyu Tolgoi.
Since Rio Tinto made its proposal on 14 March 2022, the average
share price performance of Turquoise Hill’s peers1 has declined 35%
in light of a deteriorating and more uncertain external
environment. Furthermore, Turquoise Hill has disclosed in its
latest earnings results that it needs to raise equity proceeds of
more than US$1 billion to address its current estimate of funding
requirements.
Rio Tinto will remain financially disciplined as it considers
its options. Should a transaction not proceed, Rio Tinto welcomes
the continued investment by Turquoise Hill minority shareholders
and their pro rata sharing of future risks and funding
obligations.
Rio Tinto Chief Executive Copper Bold Baatar said: “Rio Tinto
remains as committed as ever to the long-term success of Oyu
Tolgoi. While we are disappointed by this decision, we will
continue to work constructively with the Board of Turquoise Hill to
advance the Oyu Tolgoi project.”
Notes to editors
Under the terms of the Proposed Transaction, Turquoise Hill
minority shareholders would have received C$34 in cash per
Turquoise Hill share, representing a premium of 32% to Turquoise
Hill’s closing share price on the Toronto Stock Exchange on 11
March 2022, the last trading day prior to Rio Tinto’s previously
announced non-binding proposal to acquire full ownership of
Turquoise Hill. The Proposed Transaction would have valued the
Turquoise Hill minority share capital at approximately US$2.7
billion.
As previously disclosed, Rio Tinto is not interested in pursuing
any alternative transaction, including any such transaction which
would result in the sale of Rio Tinto’s interest in Turquoise Hill
or the acquisition by a third party of Turquoise Hill or Oyu Tolgoi
in partnership with or independent of Rio Tinto.
Additional disclosures
This press release does not constitute an offer to buy or sell
or the solicitation of an offer to sell or buy any securities. Any
offers, solicitations or offers to buy, or any sales of securities
will only be made in accordance with registration and other
requirements under applicable law.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. All statements other than statements of historical facts
included in this release, are forward-looking statements. The words
“intend”, “forecast”, “project”, “anticipate”, “estimate”, “plan”,
“believes”, “expects”, “may”, “should”, “will”, “target”, “pursue”,
“seek” or similar expressions, commonly identify such
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Rio Tinto
expressly disclaims any obligation or undertaking (except as
required by applicable law, the UK Listing Rules, the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority
and the Listing Rules of the Australian Securities Exchange) to
release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in its
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
All information provided in this press release, including the
forward-looking statements herein, speak only as of the date of
this press release.
The person responsible for arranging the release of this
announcement on behalf of Rio Tinto plc is Steve Allen, Group
Company Secretary.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
riotinto.com
1Based on the simple average share price performance, between
11th March 2022 (being the last trading day immediately prior to
Rio Tinto’s proposal) and 12th August 2022, of Southern Copper,
Freeport, First Quantum and Lundin Mining, representing Turquoise
Hill’s disclosed peer set in its most recent results presentation,
however excluding OZ Minerals.
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