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Turquoise Hill Resources Ltd said on Monday it was no longer considering Rio Tinto PLC's takeover offer of C$34 per share, around $25.48, for the stake in Turquoise it doesn't yet own.
The Canadian mining firm said Rio Tinto's offer did not ‘fully and fairly reflect the fundamental and long-term strategic value’ of its majority ownership in the Oyu Tolgoi copper-gold project in Mongolia.
As a result, the company said it was not in the best interest of the company or its shareholders to support Rio Tinto's proposal.
‘Market conditions in the equity and copper markets have changed significantly since the receipt of Rio Tinto's privatization proposal in March. At the same time, the company has continued to make positive progress on the underground project... Ultimately, we concluded that a transaction at the price proposed by Rio Tinto would not fairly compensate minority shareholders for the fundamental, long-term value of the Company's interest in Oyu Tolgoi,’ said Maryse Saint-Laurent, chair of the Turquoise Hill's special committee.
In March, the FTSE 100-listed miner announced it was proposing to acquire the remaining 49% of Turquoise Hill that it does not currently own. This represented a 32% premium to the firm's closing price on the Toronto Stock Exchange at the time.
The Oyu Tolgoi mine is expected to produce around 500,000 tonnes of copper annually on average from 2028 to 2036, and is likely to become the fourth largest copper mine in the world by 2030.
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