Turquoise Hill Board of Directors unanimously
recommends minority shareholders vote in favour of Rio Tinto’s best
and final offer of C$43 per share in cash
Rio Tinto has entered into a binding agreement (the “Arrangement
Agreement”) to acquire all of the remaining shares of Turquoise
Hill Resources Ltd (TSX: TRQ) (NYSE: TRQ) (“Turquoise Hill”) that
Rio Tinto does not currently own (the “Transaction”).
The Independent Directors of Turquoise Hill have unanimously
recommended that Turquoise Hill minority shareholders vote in
favour of the Transaction and, together with senior officers of
Turquoise Hill, have entered into voting support agreements with
respect to all of the Turquoise Hill shares they own or
control.
The Transaction delivers significant value to Turquoise Hill
minority shareholders with the certainty of an all-cash offer of
C$43 per share, which is Rio Tinto’s best and final offer. This
represents a premium of 67% to Turquoise Hill’s closing price of
C$25.68 per share on 11 March 2022, the day prior to Rio Tinto’s
initial public proposal to acquire Turquoise Hill.
Rio Tinto has agreed to provide Turquoise Hill with secured
short-term liquidity during the Transaction period of up to US$1.1
billion (subject to certain pre-conditions), which would need to be
repaid from an equity raising from shareholders in the first half
of 2023 if the Transaction is not approved by shareholders.
Turquoise Hill has estimated that it requires US$3.6 billion of
additional funding in total to complete the project. It aims to
address this through a funding plan including renegotiating debt
repayment dates, which requires the unanimous consent of
participating lenders. The success of this debt renegotiation and
certain other funding plans is uncertain and, if unsuccessful,
could require further equity contributions from shareholders. The
Transaction delivers certainty for the financing needs of Oyu
Tolgoi and alleviates any further funding risks for
shareholders.
Rio Tinto Chief Executive Jakob Stausholm said: “This
Transaction will simplify governance, improve efficiency and create
greater certainty of funding for the long-term success of the Oyu
Tolgoi project. Rio Tinto’s offer guarantees Turquoise Hill’s
minority shareholders outstanding value through a significant
all-cash premium for their shares. After extensive negotiations,
the terms of the transaction are final and there will be no further
price increase. We look forward to working with the Turquoise Hill
Board of Directors to ensure Turquoise Hill shareholders are able
to realise the significant and immediate value of the
Transaction.”
Rio Tinto Copper Chief Executive Bold Baatar said: “Rio Tinto
will work in direct partnership with the Government of Mongolia and
Erdenes Oyu Tolgoi to realise the full potential of the Oyu Tolgoi
project for the benefit of all stakeholders. This Transaction
rewards all minority shareholders with an exceptional premium of
67% for their shares and brings the financial certainty necessary
to ensure the Oyu Tolgoi project can be developed without having to
ask minority shareholders to contribute further significant
funds.”
The Transaction will be implemented by way of a Canadian Plan of
Arrangement and require the approval of 66.67% of votes cast by all
shareholders of Turquoise Hill (including Rio Tinto) and the
approval of a simple majority of the votes cast by minority
shareholders of Turquoise Hill. A special meeting of shareholders
of Turquoise Hill to approve the Transaction is expected as early
as possible in the fourth quarter of 2022 and, if approved, the
Transaction is expected to close shortly thereafter. Details of the
Transaction and Arrangement Agreement will be provided in the
management information circular to be mailed to Turquoise Hill
shareholders.
Advisors
Credit Suisse, RBC Capital Markets and Rothschild & Co are
acting as financial advisors to Rio Tinto, and McCarthy Tétrault
LLP and Sullivan & Cromwell LLP are acting as legal
advisors.
BMO Capital Markets is acting as exclusive advisor to the
Special Committee of Turquoise Hill and Blake, Cassels &
Graydon LLP is acting as legal counsel to the Special Committee. TD
Securities has been retained by the Special Committee as
independent valuator.
Norton Rose Fulbright Canada LLP and Paul, Weiss, Rifkind,
Wharton & Garrison LLP are acting as Canadian and U.S. legal
counsel, respectively, to Turquoise Hill.
Notes to editors
Turquoise Hill is an international mining company focused on the
operation of the Oyu Tolgoi copper-gold mine in Mongolia. Turquoise
Hill owns 66% of the Oyu Tolgoi mine with the Government of
Mongolia holding the remaining 34% interest. The total
consideration to be paid will be US$3.3bn1 which will be paid out
of existing cash reserves.
Turquoise Hill had earnings before tax of US$993 million in the
year to 31 December 2021, and a gross asset value of US$14,791
million as at 30 June 2022. Both the earnings and gross assets are
currently consolidated within Rio Tinto’s accounts.
The Transaction represents a premium of 67% to Turquoise Hill’s
closing price of C$25.68 per share on 11 March 2022, the day prior
to Rio Tinto’s public non-binding proposal to acquire Turquoise
Hill, and a premium of 125% to Turquoise Hill’s closing price of
C$19.12 per share on 24 January 2022, the day before agreeing a
path forward between the Government of Mongolia, Turquoise Hill and
Rio Tinto that enabled commencement of the underground mine at Oyu
Tolgoi.
If the Transaction is successful Rio Tinto will hold a 66%
interest in Oyu Tolgoi with the remaining 34% owned by
Mongolia.
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. 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.
LEI: 213800YOEO5OQ72G2R82 Classification: 3.1. Additional
regulated information required to be disclosed under the laws of a
Member State.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
__________________________ 1 Based on a CAD/USD FX rate of
0.764. as of 31 August 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220905005453/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
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 plc
6 St James’s Square London SW1Y 4AD United Kingdom
T +44 20 7781 2000 Registered in England No. 719885
Rio Tinto Limited
Level 43, 120 Collins Street Melbourne 3000 Australia
T +61 3 9283 3333 Registered in Australia ABN 96 004 458 404
riotinto.com
Category: Oyu Tolgoi
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