Sailingstone Capital Partners LLC, the fifth-biggest investor in Turquoise Hill Resources Ltd, says it will oppose Rio Tinto Group’s bid to buy the company for $3.3 billion, claiming the offer is well below the giant miner’s own valuation of the company.
(Bloomberg) — Sailingstone Capital Partners LLC, the fifth-biggest investor in Turquoise Hill Resources Ltd, says it will oppose Rio Tinto Group’s bid to buy the company for $3.3 billion, claiming the offer is well below the giant miner’s own valuation of the company.
Rio announced on Thursday it had reached an agreement to acquire the remainder of the Canadian mining company after six months of takeover talks. The deal would give it full control of what promises to be one of the largest copper mines in the world — Oyu Tolgoi in Mongolia. Rio already owns 51% of Turquoise Hill.
See more: Rio Tinto to Buy Balance of Turquoise Hill for $3.3 Billion
Sailingstone, a Houston-based fund manager specializing in resources companies, said on Thursday local time that Rio’s offer of C$43 a share, provisionally accepted by the Turquoise Hill board, was C$13 short of the minimum it would accept.
“Rio Tinto holds its interest in Turquoise Hill on the Rio balance sheet at $41 a share, the equivalent of C$56 a share at current exchange rates and a more than a 30% premium to the revised offer,” Sailingstone said in a statement. “This should be the bare minimum for any attempt at price discovery.”
Sailingstone holds a 2.2% stake in Turquoise Hill, according to information compiled by Bloomberg. Rio didn’t immediately respond to a request for comment.
Under the provisional agreement, more than 50% of the remaining shareholders, excluding Rio, would have to vote in favor of the deal.
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