Rio Tinto's proposed deal for giant copper mine endorsed by Glass Lewis
BNN Bloomberg
Shareholder advisory firm Glass Lewis is urging Turquoise Hill investors to support a proposed takeover by Rio Tinto Group.
Glass Lewis recommended Turquoise Hill shareholders vote for Rio Tinto’s cash offer to acquire 49 per cent of the shares it doesn’t own for $43 a share, the proxy adviser said Wednesday in a statement. The deal values the stake in the Montreal-based miner at about $4.24 billion (US$3.1 billion).
The recommendation adds a twist in Rio's efforts to gain greater control of Mongolia’s Oyu Tolgoi mine, which is expected to become the world's fourth-largest copper mine, despite resistance from some of Turquoise Hill’s largest investors. Pentwater Capital Management and SailingStone Capital Partners, which combined hold about 14 per cent of the Canadian miner, have said Rio’s offer undervalues the company.
Glass Lewis said Turquoise Hill investors should vote for Rio's offer because of the “relatively elevated risk profile” that would exist as a standalone company as well as its “significant near-term financing risks”.
