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Turquoise Hill Resources Ltd. TRQ


Primary Symbol: T.TRQ

Turquoise Hill Resources Ltd is a global mining company that primarily mines copper, gold, and coal in the Asia-Pacific region. The company holds a 66% interest in Oyu Tolgoi, one of the world's largest copper-gold-silver mines, which ships concentrate to customers in China. Oyu Tolgoi is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border. The company also holds interests in companies that mine...


TSX:TRQ - Post by User

Post by Countrygenton Nov 02, 2014 4:02pm
410 Views
Post# 23086708

RIO cannot force us to sell, right?

RIO cannot force us to sell, right?
Rio can't force all the minority shareholders to sell, but if they make a bid and aquire 90% or more of the non-Rio shareholdings as at the time of the bid (ie. excluding their pre-existing toe-hold shareholdings) then I believe the squeeze-out provisions of the Company Act can be triggered, and they can compel non-tendering shareholders to accept the bid offer.   There are other methods of going-private as well, but most have general fairness and oppression protections for the minority, although the problem is little guys in reality can't afford to litigate in most cases.  In a few Canadian cases there have been class action approvals to examine fairness or suspected colusion and other nefarious cheating of minorities, but you are talking a lot of trouble and time with great uncertainty.

The problem with all bids and buy-outs IMHO is the valuation opinions given by willing major underwriting firms that get thrown into proxy circulars ... in the opinion of XYZ FatCat Securities Inc., the bid is fair ... blah blah.  Yeah, and then secondary bids come in and ultimately bids can rise by 100% or more, or it turns out the whole ball of wax is based on valuation data that supresses major upside which isn't taken into account on prevailing valuation principles, which is compounded by the restrictive rules on estimation of resources required by the Security Regulators.  The big boys have the lawyers, the info, the data ... little guys get what they can.

Fair?  Sometimes.  Sometimes not.

Realisticly, to make a successful bid they need to tie-up a few major holders and satisfy them as to price:  https://investors.morningstar.com/ownership/shareholders-major.html?t=TRQ

cg
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