(Finance) – Rio Tintoan Anglo-Australian giant that deals with the research, extraction and processing of mineral resources, ha improved the offer to acquire 49% of the shares of the Canadian company Turquoise Hill that he doesn’t already have. Under the terms of the improved proposal, the minority shareholders of Turquoise Hill they would receive Canadian $ 40 in cash for each share. The new proposal values the minority share capital of Turquoise Hill at approximately 3.1 billion dollars.
Furthermore, it represents a 18% premium compared to Rio Tinto’s initial proposal of CAD 34 per share and a 56% premium compared to the closing price of Turquoise Hill’s stock on the Toronto Stock Exchange on March 11, 2022, the day before Rio Tinto’s initial proposal.
“Rio Tinto believes that this offer not only provides full and fair value for Turquoise Hill shareholders, but is in the best interest of all stakeholders as we work to move the Oyu Tolgoi project forward,” commented the CEO Jakob Stausholm – We will continue to adopt a disciplined approach to capital allocation and we will strongly encourage the Turquoise Hill board of directors to engage constructively and to support and recommend in favor of the improved Rio Tinto proposal. “
Since Rio Tinto presented its initial proposal on March 14, 2022, the average share price performance of Turquoise Hill’s peers has declined by 35% in light of a deteriorating and more uncertain external environment. Rio Tinto pointed out that Turquoise Hill revealed in its latest earnings results it has need to raise equity income of over $ 1 billion to meet its current estimate of funding requirements.