Institutional Shareholder Services Recommends Turquoise Hill Shareholders Vote “AGAINST” Rio Tinto’s C$43/share Privatization Transaction
24 Octubre 2022 - 3:52PM
Business Wire
Pentwater Capital Management LP ("Pentwater"), the
largest minority shareholder of Turquoise Hill Resources Ltd.
("Turquoise Hill" or the "Company") (TSX:TRQ)
(NYSE:TRQ) welcomes that leading proxy advisor Institutional
Shareholder Services has recommended that shareholders of Turquoise
Hill vote AGAINST Rio Tinto’s proposed C$43/share
privatization of Turquoise Hill, agreeing with Pentwater that the
proposal as currently structured does not fairly value TRQ’s
minority shares.
ISS stated in its report that:
- …it is clear based on comparable transactions and historical
valuation that the offer does not represent a suitable value for
shareholders
- While the offer provides an escape from the immediate downside,
certainty of value today comes at a cost that is too high to be
tolerated
- …there appears to be far more upside than downside in the
long-term
- …severity of the downside risk is outweighed by the magnitude
of the discount to NAV implied by the offer
- …securing an offer that appropriately compensates investors for
TRQ's long-term profile is paramount
- TRQ is a unique company, and its potential long-term value is
defined by considerations that are truly singular
- The offer has also been publicly criticized by several
observers, and concerns with the sale process and historical
corporate governance practices offer little in the way of
reassurance
- The value of TRQ is based on its interest in what has been
presented as a top-five copper producing mine with an estimated
life of 80 years. In other words, TRQ’s value is tied in a unique
way to objectively long-term trends and macro developments
- Had TRQ added Pentwater's nominee in the wake of the 2020 proxy
contest, when the dissident received support from approximately
two-thirds of minority shareholders, investors might have an easier
time believing that the offer represents a fair value
- … there are several important milestones already within view,
including first sustainable production for one of TRQ's three
panels in Q1 2023, and the start of cash flows in earnest in 2025.
These milestones provide a clear path through what figures to be a
period of turbulence
Based upon its detailed and careful analysis, ISS recommended
that shareholders of Turquoise Hill vote AGAINST the
proposed transaction.
The ISS recommendation reflects a clear and informed rejection
of Rio Tinto’s proposed C$43/share transaction.
Caution:
This press release is made by Pentwater Capital Management LP.
Neither this press release nor its delivery to any recipient is a
solicitation of a proxy or an offer to purchase or sell or a
solicitation of an offer to purchase or sell any assets or
securities under the securities laws of any jurisdiction, including
Canada and the United States and the federal, state, territorial or
provincial securities laws applicable therein, or a solicitation to
enter into any transaction.
Certain information in this press release may constitute
“forward-looking information”, as such term is defined in
applicable Canadian securities legislation. All statements other
than statements of historical fact may be forward-looking
information. Forward-looking information is often, but not always,
identified by words such as “seek”, “anticipate”, “plan”,
“continue”, “estimate”, “expect”, “may”, “will”, “project”,
“predict”, “potential”, “targeting”, “intend”, “could”, “might”,
“should”, “believe” and similar expressions. Forward-looking
statements are not historical facts but reflect Pentwater’s current
expectations regarding future results or events. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results or events to differ
materially from current expectations. Although Pentwater believes
that the assumptions inherent in the forward-looking statements are
reasonable, forward-looking statements are not guarantees of future
performance and, accordingly, readers are cautioned not to place
undue reliance on such statements due to the inherent uncertainty
therein. Forward-looking information is provided and
forward-looking statements are made as of the date of this press
release and, except as may be required by applicable law, Pentwater
disclaims any intention and assumes no obligation to publicly
update or revise such forward-looking information or
forward-looking statements whether as a result of new information,
future events or otherwise.
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Pentwater Capital Management LP David Zirin Chief
Operating Officer dzirin@pwcm.com 312-589-6401
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