Rio Tinto Makes All-cash Offer for Full Ownership of Turquoise Hill

Rio Tinto has made a non-binding proposal to the Turquoise Hill Board to acquire the approximately 49% of the issued and outstanding shares of Turquoise Hill that Rio Tinto does not currently own. Turquoise Hill minority shareholders would receive C$34 in cash per Turquoise Hill share, representing a premium of 32% to Turquoise Hill’s last closing share price on the Toronto Stock Exchange. This proposal would value the Turquoise Hill minority share capital at approximately US$2.7 billion.

Rio Tinto said the proposed transaction follows the recent comprehensive agreement reached between Rio Tinto, Turquoise Hill and the Government of Mongolia to move the Oyu Tolgoi project forward, reset the relationship between the partners and approve commencement of underground operations.

The company said this transaction would simplify Oyu Tolgoi’s ownership structure, strengthen Rio Tinto’s copper portfolio, and reinforce its long-term commitment to Mongolia.

“Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term,” Rio Tinto Chief Executive Jakob Stausholm said. “That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio. We believe the terms of proposal are compelling for Turquoise Hill shareholders.”

The transaction would enable Rio Tinto to work directly with the Government of Mongolia and demonstrates Rio Tinto’s “clear and unequivocal long-term commitment to Mongolia.”

Should Turquoise Hill investors not accept the proposed transaction, Rio Tinto said it welcomes their continued investment and equal share of future risks and funding obligations.

No agreement has been reached between Rio Tinto and Turquoise Hill, and there can be no assurance that any transaction will result from these discussions.