Turquoise Hill Resources Ltd (NYSE: TRQ) shares opened 30% up on Monday after Rio Tinto plc (NYSE: RIO) proposed to buy the Canadian mineral exploration and development company for about $2.7 billion in cash.
A 32% premium on Turquoise shares previous close
Rio’s bid to buy the remaining 49% of Turquoise translates to a C$34 a share – a 32% premium on the price at which TRQ closed the regular session on Friday. CEO Jakob Stausholm of the Anglo-Australian multinational said:
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.
The non-binding proposal conditions Turquoise to not raise additional equity capital. The NYSE-listed shares of Rio Tinto are 2.5% down this morning.
Turquoise Hill Resources to consider the proposal
Turquoise has a 66% stake in Oyu Tolgoi copper-gold mine in Mongolia, while the remaining 34% lies with a Mongolian state-owned entity.
The announcement comes more than a month after Rio settled its long-running dispute over Oyu Tolgoi with the Mongolian government.
The Canadian miner will set up a special committee comprising independent directors to review the proposal, as per the press release. No action is required from its shareholders at the moment.
The post Turquoise shares: why the Canadian miner just popped up 30% appeared first on Invezz.
Source: https://invezz.com/news/2022/03/14/turquoise-shares-why-the-canadian-miner-just-popped-up-30/