Rio apparently mulls Turquoise Hill buyout
- Wednesday, 12 March 2014 10:22
Source: Daily Mail
Canada has not been a happy hunting ground for mining giant Rio Tinto PLC. Investors must still remember its disastrous GBP 23 billion (USD 38 billion) acquisition of aluminum giant Alcan in 2007, a bruising top-of-the-market deal when Rio Tinto itself was under pressure from industry rivals to either get bigger or be bought. It effectively led to the sacking of boss Tom Albanese, who made way for Sam Walsh. He has bided his time before considering venturing back into the country, but apparently is now lining up a bid for the outstanding 49.2 per cent stake in Vancouver-based mineral exploration and development company Turquoise Hill Resources Ltd., formally known as Ivanhoe Mines, it does not already own.
Up more than 10 percent in the previous two session amid growing speculation a deal could be on the cards, Turquoise’ shares advanced 0.13 per cent more to USD 4.09 on talk Rio is ready to pounce with a cash offer of around USD 8 a share. Rio owns 50.8 percent of Turquoise, which holds 66 percent of the huge Oyu Tolgoi copper and gold mine. Progress on the USD 5 billion second stage of Oyu Tolgoi has been frozen because of Rio’s inability to strike an agreement with the Mongolian government. But sources now suggest a deal could be announced within the next few weeks and could coincide with Rio swallowing the rest of Turquoise.
Billionaire entrepreneur Robert Friedland, a major player in the junior mining industry, holds 3 percent of Turquoise and has thus far been against selling out to Rio.