(Toronto) Rio Tinto has canceled a controversial side deal it signed with a pair of shareholders who opposed the company’s plan to buy the minority stake in Turquoise Hill Resources it doesn’t already own.
The mining giant says it will now work with Turquoise Hill to set a new date to hold a shareholder meeting and allow shareholders to vote on its $43-a-share offer, which would get it 49 % that he does not already hold in the company.
Rio Tinto had reached an agreement with dissenting shareholders Pentwater Capital Management LP and SailingStone Capital Partners LLC that would have seen them withhold their vote on the proposal and instead exercise their dissent rights in an arrangement that included mediation and the possibility of binding arbitration.
However, voting on the takeover deal was delayed after Turquoise Hill’s special committee of independent directors raised concerns about the differential treatment of minority shareholders in the company.
The Autorité des marchés financiers du Québec also pointed out that the transaction as structured raised public interest concerns.
Turquoise Hill holds a 66% interest in the Oyu Tolgoi copper and gold mine in Mongolia. Erdenes Oyu Tolgoi LLC, a Mongolian public entity, holds the remaining 34% stake.