Rio Tinto average purchase price C$
I refer to RT press release of Jan 24:
24 January 2012
Rio Tinto moves to a majority stake in Ivanhoe Mines
Rio Tinto has taken a majority stake in Ivanhoe Mines Ltd, having purchased shares that take its interest to 51 per cent.
Rio Tinto chief executive Copper Andrew Harding, said, "Rio Tinto's move to a majority stake in Ivanhoe further demonstrates our commitment to the safe and successful development of the Oyu Tolgoi mine for the benefit of all stakeholders. We are approaching a very important phase in the development of the Oyu Tolgoi mine, with 70 per cent of the construction now complete. The lead-up to first ore in the second half of 2012 will mark an important milestone in the path towards commercial production of copper concentrate, slated for the first half of 2013."
Rio Tinto purchased an additional 15.1 million common shares of Ivanhoe, representing 2 per cent of Ivanhoe's outstanding common shares, from two sellers in a privately negotiated share purchase transaction. The shares were purchased for an aggregate of C$302 million at a price per share of C$20.00. After the completion of the share purchase, Rio Tinto will own 377,397,658 common shares of Ivanhoe representing 51 per cent of Ivanhoe's outstanding common shares.
URL: https://www.riotinto.com/media/5157_21498.asp
The CS-analysis of Jan 16, page 8 states:
Rio’s weighted average purchased price since it started to build its shareholding in Ivanhoe has been C$11.45 per share (highest price paid C$25.34 per share).
We can the update CS's numbers and calculate RT's average purchase price of IVN-shares to date:
( (377 397 658 - 15 100 000) x 11.45 + 15 100 000 x 20 ) / 377 397 658 = C$11.79 per share.
We can then conclude also RT, probably along with a majority number og larger and smaller shareholders are underwater on IVN-shares.
How could this come about?
Is the investment case of IVN and OT broken?