“The AMF considers the transaction as at the moment structured to boost public curiosity considerations,” the corporate mentioned on Wednesday.
Minority shareholder CaravelCapital Investments mentioned final week the settlement inked by Rio Tinto, Pentwater Capital Administration and SailingStone Capital Companions provides dissidents preferential remedy over smaller holders.
Caravel filed complaints with each the Ontario Securities Fee and the AMF on equity grounds, The Globe and Mail reported.
The recent delay provides one other layer of uncertainty over the deal that might grant the Rio Tinto direct possession of the large Oyu Tolgoi copper-gold mine in Mongolia.
Beneath the deal, each buyers can be paid out 80% of the takeover quantity being supplied to all Turquoise Hill shareholders and, after a ruling from an arbitrator, the remaining 20% plus curiosity, and doubtlessly far more.
The 2 corporations, which had each overtly opposed the acquisition of Turquoise Hill by Rio, agreed to take a seat out the shareholder vote initially scheduled for November 1, then moved up to November 8 and once more to November 15 on Tuesday.
Differential remedy of shareholders
With the choice now to be made at a “date to be decided”, Turquoise Hill is holding talks with Rio representatives to deal with what it qualifies as “differential remedy of minority shareholders”.
If an settlement that fulfill the committee is reached, the corporate mentioned it might replace markets.
Rio Tinto has had a rocky relationship with Turquoise Hill, notably over how you can fund Oyu Tolgoi’s enlargement. The mining large has additionally drawn criticism from a few of Turquoise Hill’s minority shareholders in regards to the management it exerts over the corporate.
The Melbourne and London-based agency, which has mined copper from Oyu Tolgoi’s open pit for a decade, and the Mongolian authorities ended earlier this yr a long-running dispute over the $7 billion enlargement of the mine.
As soon as accomplished, the underground part of Oyu Tolgoi will raise manufacturing from 125,000–150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now anticipated by 2025 on the earliest. This might make it the largest new copper mine to return on stream in a number of years.
“Rio Tinto’s technique over its stake in Turquoise Hill has been topic to dialogue for a few years, however we didn’t assume it might find yourself providing to purchase out the minorities based mostly on earlier kind,” BMO Metals and Mining analysts mentioned in a observe to buyers.
“Given the dearth of copper alternatives elsewhere, mixed with its just lately lowered threat profile, maybe growing its Oyu Tolgoi publicity now is smart,” BMO Alexander Pearce and David Gagliano wrote in September.
Rio Tinto chief govt Jakob Stausholm has mentioned the proposed takeover would simplify governance, enhance effectivity and create higher certainty of funding for the long-term success of the Oyu Tolgoi venture.