SailingStone Capital Partners, a long-time investor in TSX- and NYSE- listed Turquoise Hill Resources, will vote against the copper/gold company’s takeover by majority shareholder Rio Tinto at a shareholders’ meeting on November 1.
The C$43-a-share offer that a special committee of independent directors at Turquoise Hill recommended minority shareholders accept, “significantly undervalued” Turquoise Hill, SailingStone said on Friday.
“[The bid] attempts to take advantage of the material governance failures created by Rio Tinto and the Turquoise Hill independent directors over the last decade,” it said in a statement.
SailingStone said that there were a “litany” of corporate governance failures at Turquoise Hill and Rio Tinto and believed that the valuation process had been “arbitrary”.
The all-cash bid “in no way represents the intrinsic value of a tier 1 asset, such as Oyu Tolgoi”.
Pentwater Capital Management has also argued that Rio Tinto’s offer price undervalued Turquoise Hill, arguing that there is a high probability copper prices will be higher than $4/lb over the next decades amid growing demand for the metal to power the energy transition.
Rio Tinto CEO Jakob Stausholm has made it clear that its offer is final.
The Oyu Tolgoi mine, which is expected to become the world’s fourth-largest copper mine, is a joint venture between Turquoise Hill and the government of Mongolia.