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After Rio Tinto's bid in March, which the global miner hoped
would clear the way to direct ownership of the massive Oyu
Tolgoi copper-gold mining project in Mongolia, Turquoise Hill
appointed an independent committee to determine if C$34 ($26.57)
per share was in the best interest of minority shareholders.
"Engagement between the parties has not resulted in a consensus
on value and price or in any improved proposal from Rio Tinto,"
Turquoise Hill said in a statement.
Turquoise Hill added that the committee considered a retreat in
the price of copper since the March offer but also said good
progress was achieved in recent months on the underground
project.
"Rio Tinto is disappointed by the decision of the Special
Committee and continues to believe that the terms of the
Proposed Transaction would deliver compelling value for
Turquoise Hill minority shareholders and provide the certainty
of an all-cash offer at an attractive premium," the
Anglo-Australian miner said in a statement.
Toronto-listed Turquoise Hill has a market capitalisation of
$5.3 billion. Its U.S.-listed shares dropped 8.6% pre-market to
$24.
Interim Chief Executive Steve Thibeault said Turquoise Hill's
funding agreement with Rio Tinto remained in effect and that the
company expected it to provide sufficient liquidity to meet
funding requirements.
In May, the Canadian company said Rio Tinto would provide an
interim debt funding of up to $400 million.
Rio's offer had seen opposition from major Turquoise Hill
shareholders, including activist investor Pentwater Capital
Management, the largest minority shareholder with a 10% stake,
who said the offer was too low.
Pentwater Capital was not immediately available to comment.
($1 = 1.2795 Canadian dollars)
(Editing by Subhranshu Sahu and Emelia Sithole-Matarise)
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