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RIO Stock Went Down After the CEO of Rio Tinto Said That Their Latest Bid for Turquoise Hill Was Their Last.

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Rio Stock (NYSE:RIO)

RIO stock declined despite a senior investor’s claims that Rio Tinto’s (NYSE:RIO) offer undervalued the Oyu Tolgoi copper mine in Mongolia; Rio Tinto CEO Jakob Stausholm told Bloomberg on Tuesday that the company will not make an improved offer to acquire full ownership of Turquoise Hill Resources (NYSE:TRQ).

Stausholm remarked, “I feel pure at heart that we’ve offered a full price.” He did not know what each individual shareholder was hoping to accomplish.

Due to the overwhelming chance that copper prices would climb due to strong demand for the metal to power the energy transition, Pentwater Capital Management bought $2.5M worth of Turquoise Hill (TRQ) last week, bringing its total investment to roughly 14%, has argued Rio Tinto (NYSE:RIO) offer was too low.

If minority shareholders don’t approve the agreement, RIO stock and TRQ stock will be on the hook to reinvest $3.6B over the following two and a half years.

These remarks from the CEO come just a few weeks after Rio Tinto (NYSE:RIO) agreed to purchase the remaining 49% of Turquoise Hill.

Pentwater Capital, a shareholder in Turquoise Hill Resources (NYSE:TRQ), announced on Thursday that it has purchased 2.5 million shares in anticipation of voting against the sale of the company to Rio Tinto (NYSE:RIO). TRQ declined by 2%, and RIO stock fell by 1.4%.

Pentwater spent C$102.5 million to acquire 2.5 million shares at C$41 per share. According to its disclosures, a total of 4.23 million shares of TRQ were purchased by the fund from Tuesday through Thursday this week. In a statement released late Thursday, Pentwater Funds revealed that it had acquired about 27.7 million shares or 13.8% of Turquoise Hill

Pentwater Capital upped its holding after declaring on Monday that it would not support Rio Tinto’s (RIO) C$43/share bid to acquire the remaining shares of the miner it does not already control. After RIO stock owns over 50% of TRQ, Pentwater is Turquoise Hill’s second-largest shareholder.

As of this past Friday, Pentwater said that it does not support the C$43/share proposal for Turquoise Hill (TRQ) and is considering its alternatives in light of this news. A month ago, SailingStone Capital, a holder of Turquoise (TRQ), announced that it did not approve Rio Tinto’s (NYSE:RIO) offer to acquire the company. A 2.1% interest in TRQ is held by SailingStone.

There would be no future price hikes, RIO stock CEO Jakob Stausholm said in a statement last Monday after TRQ accepted the revised bid.

Stausholm added, “After extensive talks, the deal’s conditions are final, and there will be no further price increase.”

Featured Image-  Megapixl @ Rafaelhenriquepress

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