RE:RE:RE:RE:RE:RE:RE:OWNERSHIPIf the market consensus was $8, even with a short cap on trading I would expect the current price would be closer to $6 plus today.
At a 15% yield on the share purchase you are asking the Rio Tinto financial advisers to recommend to their Board OTTLC can earn an average of around $3.6 billion annually. While there may be a premium for the excellent and saleable reserves (Heruga), and exploration upside on the JV ground, it is probable given the past 12 years' experience to also expect a discount based on nation risks, China/copper price risks ... etc.,. The grades and production capacity of OT over the next ten years, even if expansion decisions are made promptly, don't appear to me to support the required earnings, unless they are based on a copper price closer to $4.
I see that short position in TRQ as trying to hold up a speculative rise so a bid can come to market with a nice 25 to 30 premium. That would be around $6 perhaps.
On the side of the minority as stated Canadian takeover law requires same price. It also permits third parties to make competing offers, and Sailingstone, Pentwater and Temasek, while they may enter into lock-up agreements to induce the bid to proceed, are likely to have a premium to bid option out - which forces Rio to be careful to not underbid their price.
RF sold a big chunk at a time when copper prices were much higher, Chinese growth was robust, and before the time-wasting stand-off with the Mongolian government, Hotel Mongolia etc.,.
There are other copper assets around the world competing for the Rio Tinto copper production acquisition budget - the price is not determined in a vacuum. If the stock trades too high against the target price then it will be sold down, or Rio Tinto will pour cold water on it by saying at this time they are deferring any decision. The short position could well be out of some of the major holders who are trying to shield their target bid price. No doubt many calculators and pencils have scratched out many scenarios and price arguments given the size of the big positions.
Just my HO.
cg