The Wolfson Centre for Bulk Solids Handling Technology

Turquoise Hill transaction Agreement in Principle with Rio Tinto

(Posted on 01/09/22)

Turquoise Hill Resources Ltd. has announced that it has reached an agreement in principle and entered into a term sheet with Rio Tinto International Holdings Ltd. in respect of a transaction whereby Rio Tinto would acquire the approximately 49% of the issued and outstanding shares of Turquoise Hill that Rio Tinto does not currently own for C$43 per share in cash.

The Transaction is the result of extensive negotiations between the Special Committee of independent directors (the “Special Committee”) of Turquoise Hill and Rio Tinto that took place following the receipt on August 24, 2022 of an improved non-binding proposal from Rio Tinto of C$40 per share. These discussions ultimately culminated in the C$43 per share consideration offered pursuant to the Transaction, which has the unanimous support of the Special Committee.

The purchase price of C$43 per share reflects a:

67% premium to Turquoise Hill’s closing price of C$25.68 per share on March 11, 2022, being the date prior to Rio Tinto’s initial public proposal to acquire Turquoise Hill;

26% increase in the consideration as compared to Rio Tinto’s initial proposal on March 13, 2022 of C$34.00 per share;

8% increase in the consideration as compared to Rio Tinto’s revised proposal on August 24, 2022 of C$40.00 per share; and

19% premium to Turquoise Hill’s closing price of C$36.12 on August 31, 2022.

In approving the entering into of the agreement in principle, the Special Committee took into consideration a variety of factors relevant to determining that the offer price is fair to minority shareholders of the Company.

Maryse Saint-Laurent, Chair of the Special Committee said, “Our discussions with Rio Tinto resulted in material increases from the price first offered by Rio Tinto to the minority shareholders of Turquoise Hill while also ensuring Turquoise Hill’s additional funding needs will be met pending the consideration by shareholders of the proposed Transaction. The Special Committee has diligently considered these and a wide variety of other factors in reaching its determination to unanimously approve entering into the agreement in principle.”

Turquoise Hill Board Chair Peter Gillin said, “I want to thank the members of the Special Committee for their diligence in assessing and evaluating the proposals received from Rio Tinto since March. Also, I want to acknowledge the good faith efforts by Rio Tinto in negotiating with the Special Committee to come to this agreement in principle.”