Turquoise Hill’s fifth largest investor to reject Rio Tinto’s US$3.3B takeover bid

Sailingstone Capital Companions, the fifth-biggest investor in Turquoise Hill Assets (TSX: TQR) stated on Friday it’s going to vote towards Rio Tinto‘s (NYSE: RIO; LSE: RIO; ASX: RIO) supposed US$3.3 billion takeover of the Canadian miner, in a shareholder assembly on Nov. 1.

The activist investor stated that Rio’s bid not solely undervalues the goal, but it surely additionally intends to make the most of the “materials governance failures” created by impartial administrators of each mining firms during the last decade.

Sailingstone, a U.S.-based fund supervisor specializing in assets firms which have a 2.2% stake in Turquoise Hill, had already stated it thought-about the provide too low and “opportunistic.”

Rio Tinto introduced on Sept. 1 it had reached an settlement after six months of takeover talks to purchase the 49% of the Canadian miner it didn’t already personal for a determine about 20% increased than the unique US$2.7 billion bid, which it made in March.

The deal would give the worldwide miner a 66% stake within the big Oyu Tolgoi mine in Mongolia, one of many world’s largest recognized copper and gold deposits. The remaining 34% is owned by the Mongolian authorities.

Rio Tinto has had a rocky relationship with the Quebec-based miner, notably over  fund Oyu Tolgoi’s growth. Rio has additionally drawn criticism from a few of Turquoise Hill’s minority shareholders concerning the management it exerts over the corporate.

The worldwide miner, which has mined copper from Oyu Tolgoi’s open pit for a decade, and the Mongolian authorities ended earlier this 12 months a long-running dispute over the $7 billion growth of the mine. 

Rio Tinto chief govt Jakob Stausholm has stated the proposed takeover would simplify governance, enhance effectivity and create better certainty of funding for the long-term success of the Oyu Tolgoi challenge.

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