REG - Rio Tinto - All-cash proposal to acquire Turquoise Hill

Rio TintoAnnouncement

14/03/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220314:nRSN6360Ea&default-theme=true

RNS Number : 6360E  Rio Tinto PLC  14 March 2022

14 March 2022

Rio Tinto Makes All-Cash Proposal to Acquire Full Ownership of Turquoise Hill

·    Creates a more efficient ownership and governance structure for the
Oyu Tolgoi project

·    Strengthens Rio Tinto's copper portfolio and reinforces long-term
commitment to Mongolia

·    C$34 per share proposed acquisition price values Turquoise Hill
minority shareholdings at US$2.7 billion

·    Opportunity for Turquoise Hill shareholders to realise compelling,
immediate and certain value

 

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 (the "Proposed
Transaction"). Under the terms of the Proposed Transaction, 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.

 

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. It would simplify the Oyu
Tolgoi ownership structure, strengthen Rio Tinto's copper portfolio, and
reinforce its long-term commitment to Mongolia. In addition, the Proposed
Transaction provides Turquoise Hill minority shareholders with the ability to
realise compelling, immediate and certain value for their shares at a time
when uncertainties inherent in the development of the underground operations
and funding of such development remain.

 

Rio Tinto Chief Executive Jakob Stausholm said "Rio Tinto strongly believes in
the long-term success of Oyu Tolgoi and Mongolia, and delivering for all
stakeholders over the long-term. 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 Proposed Transaction would enable Rio Tinto to work directly with the
Government of Mongolia to move the Oyu Tolgoi project forward with a simpler
and more efficient ownership and governance structure. With our relationship
reset and the underground operations commenced, this transaction demonstrates
our clear and unequivocal long-term commitment to Mongolia."

 

Rio Tinto looks forward to working constructively with the Turquoise Hill
Board to progress the Proposed Transaction. Should Turquoise Hill investors
not accept the Proposed Transaction, Rio Tinto welcomes their continued
investment and equal share of future risks and funding obligations.

 

Rio Tinto's proposal to the Turquoise Hill Board will be filed promptly with
the Securities and Exchange Commission in accordance with applicable laws and
regulations in the United States. The Proposed Transaction, which is expected
to be conducted by way of a Canadian plan of arrangement, will be subject to
customary closing conditions, including approval by a majority of the votes
cast by Turquoise Hill minority shareholders. The Proposed Transaction is not
subject to any financing condition or due diligence.

 

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.
 Even if a transaction is agreed, there can be no assurances as to its terms,
structure or timing.

 

Credit Suisse, RBC Capital Markets and Rothschild & Co are acting as
financial advisors to Rio Tinto, and McCarthy Tétrault LLP and Sullivan &
Cromwell LLP are acting as legal advisors. Rio Tinto and its advisors stand
ready to work with the Turquoise Hill Board of Directors to agree to the terms
of, and implement, the Proposed Transaction.

Notes to editors

 

Given Rio Tinto's approximately 51% ownership in Turquoise Hill, the Proposed
Transaction will be required to follow the rules set out in Canadian
Multilateral Instrument 61-101 - Protection of Minority Shareholders in
Special Transactions. This will require, among other things, a Special
Committee of the Turquoise Hill Board, which will not include any Rio Tinto
nominees, to assess the terms of the Proposed Transaction. As part of that
assessment the Special Committee will need to obtain a formal valuation of the
common shares in Turquoise Hill by an independent valuator.

 

With the Special Committee's support, and after completion of the independent
valuation and agreement between Rio Tinto and Turqouise Hill on the terms and
conditions of the transaction, Turquoise Hill will schedule a meeting of its
shareholders to approve the transaction. The  transaction must be approved by
a vote by (i) holders of 66 2/3% or more of the Turquoise Hill shares, and
(ii) a majority of the Turquoise Hill minority shareholders, in each case of
those shares voted at the meeting.

 

If the Proposed Transaction is successful Rio Tinto will hold a 66% interest
in Oyu Tolgoi with the remaining 34% owned by Mongolia.

 

The valuation of Turquoise Hill minority shareholdings at US$2.7 billion is
based on a Canadian dollar exchange rate of US$0.7874 as at 11 March.

 

Rio Tinto Canadian early warning disclosure

 

Rio Tinto currently beneficially owns 102,196,643 common shares of Turquoise
Hill, representing approximately 51% of the issued and outstanding common
shares of Turquoise Hill. Rio Tinto also has anti-dilution rights that permit
it to acquire additional securities of Turquoise Hill so as to maintain its
proportionate equity interest in Turquoise Hill from time to time.

 

This announcement is authorised for release to the market by, and a copy of
the related early warning report may be obtained from, Rio Tinto's Group
Company Secretary.

 

The head office of Turquoise Hill is located at 1 Place Ville-Marie, Suite
3680, Montreal, Quebec, Canada H3B 3P2.

 

Additional disclosures

 

This press release does not constitute an offer to buy or sell or the
solicitation of an offer to sell or buy any securities. Any offers,
solicitations or offers to buy, or any sales of securities will be made in
accordance with registration and other requirements under applicable law.

 

Forward-Looking Statements

 

This press release includes "forward-looking statements" within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts included in this release, are
forward-looking statements. The words "intend", "forecast", "project",
"anticipate", "estimate", "plan", "believes", "expects", "may", "should",
"will", "target", "pursue", "seek" or similar expressions, commonly identify
such forward-looking statements. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Among the factors that could cause actual results
to differ materially include, but are not limited to, those relating to
whether any definitive offer will be made, whether the definitive offer will
be accepted and approved, whether any agreement will be executed, or whether
this or any other transaction will be consummated. Rio Tinto expressly
disclaims any obligation or undertaking (except as required by applicable law,
the UK Listing Rules, the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority and the Listing Rules of the Australian Securities
Exchange) to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in its expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statement is based. All information provided in this press release,
including the forward-looking statements herein, speak only as of the date of
this press release.

 

This announcement contains inside information. The person responsible for
arranging the release of this announcement on behalf of Rio Tinto plc is Steve
Allen, Group Company Secretary.

 

LEI: 213800YOEO5OQ72G2R82

Classification: 3.1. Information disclosed under article 19 of the Market
Abuse Regulation.

 

 

 Contacts  Please direct all enquiries to media.enquiries@riotinto.com

 

 Media Relations, UK         Media Relations, Australia

 Illtud Harri                Jonathan Rose

 M +44 7920 503 600          M +61 447 028 913

 David Outhwaite             Matt Chambers

 M +44 7787 597 493          M +61 433 525 739

 Media Relations, Americas   Jesse Riseborough

 Matthew Klar                M +61 436 653 412

 T +1 514 608 4429

                             Investor Relations, Australia

 Investor Relations, UK      Amar Jambaa

 Menno Sanderse              M +61 472 865 948

 M: +44 7825 195 178

 David Ovington

 M +44 7920 010 978

 Clare Peever

 M +44 7788 967 877

 Rio Tinto plc               Rio Tinto Limited

 6 St James's Square         Level 7, 360 Collins Street

London SW1Y 4AD

United Kingdom             Melbourne 3000

 

                           Australia
 T +44 20 7781 2000

Registered in England

 No. 719885                  T +61 3 9283 3333

                             Registered in Australia

                             ABN 96 004 458 404

 

 

 

riotinto.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCBKQBBABKKNND