(Corrects paragraph 4 to say Rio Tinto raised its offer twiceto C$43, not thrice to C$45. The error also appeared in the previous update of the story) By Melanie Burton MELBOURNE, Nov 18 (Reuters) - Rio Tinto Ltd said on Friday it would plough ahead with a $3.3 billion bid tobuy the 49% of Canada's Turquoise Hill Resources thatit does not already own, after it ended separate talks withdissenting minority shareholders.
The Anglo-Australian miner is seeking to simplify itsmanagement of the giant Oyu Tolgoi copper mine in Mongolia thatit operates, but shares ownership through Turquoise Hill and theMongolian government.
Rio needs two-thirds of voting Turquoise Hill shareholdersto back its bid, including its own 51% stake, and a simplemajority of the rest of the voting shareholders.
It has raised its offer for Turquoise Hill twice to C$43,but that has failed to satisfy Pentwater Capital andSailingStone Capital, two of its biggest minority shareholders,which own stakes of 15.2% and 2.2%, respectively. Rio had reached an agreement with both that they wouldabstain from a shareholder vote on the proposal on Nov. 15.Turquoise Hill, investors and the Canadian regulator raisedconcerns that minority shareholders could be treated differentlyunder the agreement's conditions. "This announcement just takes us back to where we were 4-5weeks ago," Barrenjoey analyst Glyn Lawcock said, adding that heexpected a new shareholder vote before the year ends.
"There isn't a carve-out for (Pentwater and SailingStone).What that means is that everyone is in the same camp. We don'tknow what Pentwater and SailingStone will do, but it will beclose." Turquoise Hill has twice pushed back the shareholder vote onRio's proposal. Turquoise on Friday acknowledged Rio's announcement and saidit plans to apply to the Supreme Court of Yukon for an amendedinterim order to set a new date for the special meeting. Rio Tinto Copper Chief Executive Officer Bold Baatar said,"We have acknowledged feedback received from minorityshareholders and returned to the proposal originally unanimouslyrecommended by the Turquoise Hill Special Committee." (Reporting by Sameer Manekar in Bengaluru; Editing by ShaileshKuber and Rashmi Aich)
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