Rio Tinto has hit another snag in its takeover bid for Turquoise Hill Resources, with a Canadian regulator flagging public interest concerns.
“The company (Turquoise Hill) and Rio Tinto have been advised by the Autorité des marchés financiers (AMF) that, in light of the announcement of the agreements last week, the AMF considers the transaction as currently structured to raise public interest concerns,” the Canadian mining company said in a statement.
The Canadian financial regulator flagged public interest concerns over an arrangement that may have seen Rio treating some Turquoise Hill investors with “differential treatment” (ie paying more for their shares) compared to other shareholders.
The postponement is the latest chapter in what has been a long and winding road of Rio Tinto trying to acquire the 49 per cent stake in Turquoise Hill it doesn’t already own, with the ultimate goal of taking control of the Oyu Tolgoi project in Mongolia, said to be one of the world’s largest known copper and gold deposits.
Rio Tinto made its first move on the Montreal-based miner in March at a price of $US2.7 billion ($4.08 billion). When that initial offer was formally terminated in mid-August, Rio later came back with a beefed up offer of $US3.1 billion ($4.69 billion).
The third time seemingly proved the charm and the Turquoise Hill board accepted Rio’s offer of $US3.3 billion ($4.99 billion) bid for the company in late-August.
More recently, Rio Tinto delayed a special shareholder meeting to vote on the proposed takeover.
And in light of the regulator’s ruling, Turquoise Hill said its shareholder now need more information and a planned November 15 meeting where shareholders were poised to vote on the deal would have to be postponed.
Time will tell if this latest blow will prove to be the fatal one.