Rio strikes a deal with Turquoise Hill securityholders
PERTH (miningweekly.com) – Mining major Rio Tinto has struck an agreement with Turquoise Hill securityholders Pentwater Capital Management and SailingStone Capital Partners, with the takeover target postponing the special meeting until November 8.
Under the agreements, the securityholders have agreed to withhold their votes at Turquoise Hill’s special meeting on November 8, and exercise their dissent rights in respect of Rio’s proposed C$43-a-share acquisition of the remaining 49% interest in Turquoise Hill.
Rio Tinto has agreed to increase the dissent condition under the arrangement agreement from 12.5% to 17.5% of Turquoise Hill shares issued and outstanding. Under the agreements, the parties have also agreed that the dissent proceedings with the securityholders and certain other claims shall be conducted by arbitration, and the securityholders shall be paid C$34.40 of the consideration following the completion of the arrangement, with the remaining consideration payable following the final determination of the arbitration.
Rio on Wednesday confirmed that its C$43 a share offer for Turquoise Hill was its best and final offer.
The major previously said that the transaction would simplify governance, improve efficiency and create greater certainty of funding for the long-term success of the Oyu Tolgoi project, and would provide Turquoise Hill shareholders with certainty.
Turquoise Hill previously estimated that it requires $3.6-billion of additional funding in total to complete the project. It aims to address this through a funding plan including renegotiating debt repayment dates, which requires the unanimous consent of participating lenders. The success of this debt renegotiation and certain other funding plans is uncertain and, if unsuccessful, could require further equity contributions from shareholders.
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