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Canada’s Turquoise Hill Resources has rejected Rio Tinto’s $2.7bn offer to acquire the remaining 49% stake in the company, concluding that the proposal did not ‘reflect full and fair value’.

In consultation with its financial advisor BMO Capital Markets, the special committee of independent directors appointed by Turquoise Hill determined that Rio Tinto’s offer price of C$34 ($26.66) for each Turquoise share does not fairly reflect the strategic value of Turquoise’s stake in the Oyu Tolgoi project in the South Gobi region of Mongolia.

The committee concluded that the offer price was ‘well below’ a range of values implied by a preliminary analysis carried out by TD Securities.

Turquoise said that the committee terminated its review and consideration of Rio Tinto’s bid.

The committee stated the engagement between the firms could not lead to a ‘consensus on value and price’ or any improved proposal from the Anglo-Australian mining firm.

In March 2022, Rio Tinto offered to acquire the 49% interest it doesn’t already own in Turquoise Hill. The transaction would have paved the way for Rio to own a majority stake in the Oyu Tolgoi copper/gold project, which is one of the world’s largest known copper and gold deposits.

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Rio Tinto, which owns a 50.8% stake in Turquoise Hill, said it is disappointed by the special committee’s decision and continues to believe that the offer would deliver compelling value for Turquoise’s minority shareholders.

Rio Tinto CEO Copper Bold Baatar said: “Rio Tinto remains as committed as ever to the long-term success of Oyu Tolgoi. While we are disappointed by this decision, we will continue to work constructively with the Board of Turquoise Hill to advance the Oyu Tolgoi project.”

Turquoise Hill owns 66% of the Oyu Tolgoi copper-gold mine while the remaining stake of 34% is held by the Mongolian Government.

Rio Tinto also stated: “As previously disclosed, Rio Tinto is not interested in pursuing any alternative transaction, including any such transaction which would result in the sale of Rio Tinto’s interest in Turquoise Hill or the acquisition by a third party of Turquoise Hill or Oyu Tolgoi in partnership with or independent of Rio Tinto.”