Rio Tinto has submitted an improved non-binding proposal to the
Turquoise Hill Board to acquire the approximately 49% of the issued
and outstanding shares of Turquoise Hill that Rio Tinto does not
currently own (the “Improved Proposal”).
Under the terms of the Improved Proposal, Turquoise Hill
minority shareholders would receive C$40 in cash per Turquoise Hill
share.
This proposal values the Turquoise Hill minority share capital
at approximately US$3.1 billion and represents a:
- 18% premium to Rio Tinto’s initial proposal of C$34 per
share;
- 56% premium to Turquoise Hill’s closing share price on the
Toronto Stock Exchange on 11 March 2022, the day prior to Rio
Tinto’s initial proposal; and
- 109% premium to Turquoise Hill’s closing share price on the
Toronto Stock Exchange prior to the January announcement of the
reset of the Oyu Tolgoi relationship.
Rio Tinto Chief Executive Jakob Stausholm said: “Rio Tinto
believes this offer not only provides full and fair value for
Turquoise Hill shareholders, but is in the best interests of all
stakeholders as we work to move the Oyu Tolgoi project forward. We
will continue to take a disciplined approach to capital allocation
and strongly encourage the Board of Turquoise Hill to engage
constructively, and to support and recommend in favour of Rio
Tinto’s Improved Proposal.”
Since Rio Tinto made its initial 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.
The Improved Proposal reflects full and fair value for the
Turquoise Hill minority shareholders and delivers the certainty of
cash at a material premium.
The Improved Proposal has the same conditions as Rio Tinto’s
initial proposal, including, but not limited to, (i) the full
support of and a positive recommendation by the Turquoise Hill
Special Committee; (ii) no equity capital is issued by Turquoise
Hill pending completion of the transaction.
On Turquoise Hill’s agreement with the terms of the Improved
Proposal, Rio Tinto is prepared to discuss appropriate further
amendments to the updated financing arrangements between Turquoise
Hill and Rio Tinto dated 18 May 2022, and provide Turquoise Hill
with the necessary liquidity to operate through completion of the
transaction.
The Improved Proposal, which is expected to be conducted by way
of a Canadian plan of arrangement, will be subject to customary
closing conditions, including approval by a majority of the votes
cast by Turquoise Hill minority shareholders. The Improved Proposal
is not subject to any financing condition or due diligence.
No agreement 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, structure or
timing.
1 Based on the simple average share price performance, between
11th March 2022 (being the last trading day immediately prior to
Rio Tinto’s proposal) and 23 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.
Notes to editors
Given Rio Tinto’s approximate 51% ownership in Turquoise Hill,
the Improved Proposal will be required to follow the rules set out
in Canadian Multilateral Instrument 61-101 – Protection of Minority
Shareholders in Special Transactions. This will require, among
other things, a Special Committee of the Turquoise Hill Board,
which will not include any Rio Tinto nominees, to assess the terms
of the Improved Proposal. As part of that assessment the Special
Committee will need to obtain a formal valuation of the common
shares in Turquoise Hill by an independent valuator.
With the Special Committee’s support, and after completion of
the independent valuation and agreement between Rio Tinto and
Turquoise Hill on the terms and conditions of the transaction,
Turquoise Hill will schedule a meeting of its shareholders to
approve the transaction. The transaction must be approved by a vote
by (i) holders of 66 2/3% or more of the Turquoise Hill shares, and
(ii) a majority of the Turquoise Hill minority shareholders, in
each case of those shares voted at the meeting.
If the Improved Proposal is successful Rio Tinto will hold a 66%
interest in Oyu Tolgoi with the remaining 34% owned by the
Government of Mongolia.
The valuation of Turquoise Hill minority shareholdings at US$3.1
billion is based on a Canadian dollar exchange rate of US$0.771 as
at 23 August 2022.
Rio Tinto Canadian early warning disclosure
Rio Tinto currently beneficially owns 102,196,643 common shares
of Turquoise Hill, representing approximately 51% of the issued and
outstanding common shares of Turquoise Hill. Rio Tinto also has
anti-dilution rights that permit it to acquire additional
securities of Turquoise Hill so as to maintain its proportionate
equity interest in Turquoise Hill from time to time.
This announcement is authorised for release to the market by,
and a copy of the related early warning report may be obtained
from, Rio Tinto’s Group Company Secretary.
The head office of Turquoise Hill is located at 1 Place
Ville-Marie, Suite 3680, Montreal, Quebec, Canada H3B 3P2.
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 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. Among the
factors that could cause actual results to differ materially
include, but are not limited to, those relating to whether any
definitive offer will be made, whether the definitive offer will be
accepted and approved, whether any agreement will be executed, or
whether this or any other transaction will be approved and
consummated. 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.
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of Rio Tinto plc is Steve Allen, Group Company
Secretary.
LEI: 213800YOEO5OQ72G2R82 Classification: 3.1. Information
disclosed under article 19 of the Market Abuse Regulation.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
riotinto.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220824005458/en/
Please direct all enquiries to
media.enquiries@riotinto.com Media Relations, UK
Illtud Harri M +44 7920 503 600
Matthew Klar M+ 44 7796 630 637
David Outhwaite M +44 7787 597 493
Media Relations, Americas
Simon Letendre M +514 796 4973
Malika Cherry M +1 418 592 7293
Investor Relations, UK
Menno Sanderse M: +44 7825 195 178
David Ovington M +44 7920 010 978
Clare Peever M +44 7788 967 877
Rio Tinto plc 6 St James’s Square London SW1Y 4AD United
Kingdom T +44 20 7781 2000 Registered in England No. 719885
Media Relations, Australia
Jonathan Rose M +61 447 028 913
Matt Chambers M +61 433 525 739
Jesse Riseborough M +61 436 653 412
Investor Relations, Australia
Amar Jambaa M +61 472 865 948
Rio Tinto Limited Level 43, 120 Collins Street Melbourne
3000 Australia T +61 3 9283 3333 Registered in Australia ABN 96 004
458 404
Category: General
Rio Tinto (NYSE:RIO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rio Tinto (NYSE:RIO)
Historical Stock Chart
From Jul 2023 to Jul 2024