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Activist investor Pentwater Capital has rejected Rio Tinto’s (NYSE:RIO) $2.7B takeover bid for Turquoise Hill Resources (NYSE:TRQ) as too low, Reuters reports, citing an investor letter to Turquoise Hill’s independent directors.
“It is highly improbable that Rio will be successful at its current bid price and equally improbable that Turquoise Hill shares will ever fall back to the levels they traded at prior to Rio’s offer,” according to the letter from Turquoise’s largest minority shareholder, with a ~10% stake.
On Monday, Rio proposed to buy out the 49% minority shareholders in Turquoise Hill for C$34/share (US$26.60) in cash, paving the way for direct ownership of the massive Oyu Tolgoi copper-gold mining project in Mongolia.
Some analysts have said they expect Turquoise Hill shareholders will seek a materially higher offer from Rio Tinto.
