Rio Tinto’s bid to complete a takeover of Turquoise Hill Resources has hit another snag with a Canadian regulator opting to take a closer look at a deal done with the most vocal of the dissenting shareholders.

The intervention of the body responsible for financial regulation in Quebec has forced the postponement of a shareholder vote to decide the fate of the $US3.3 billion ($5.1 billion) deal aimed at simplifying the ownership structure of Mongolia’s Oyu Tolgoi copper mine.

Turquoise Hill said it has postponed the vote until November 15 because Autorite des Marches Financiers (AMF) is in discussions with Rio Tinto about the “dissent rights and procedures available to holders of minority shares”.

Rio sought the latest postponement at the request of AMF as talks continue between the mining giant, the regulator and Turquoise Hill’s special committee of independent directors.

Loudest critics

Turquoise Hill shareholders Sailingstone Capital Partners and Pentwater Capital Management last week agreed to withhold their votes on the takeover bid in what was seen as a significant boost for Rio’s hope of getting the deal across the line.

Sailingstone, which owns 2.2 per cent of Turquoise Hill, and Pentwater, with more than 15 per cent of the stock, have been the loudest critics of Rio’s involvement in Oyu Tolgoi over the past decade. Both had expressed dissatisfaction with Rio’s $C43 per share takeover offer.

However, in the lead-up to the vote, Pentwater and Sailingstone opted to exercise rights offered under Canadian mergers and acquisitions regulations, which allow shareholders in a target company to nominate their shares as “dissenting”.

The price received by dissenting shareholders is determined through a subsequent arbitration process that has no influence over whether the deal goes ahead. In this case, Rio agreed to guarantee Pentwater and Sailingstone at least $C34.40 per share if the arbitration-decided price came in at a lower amount.

Rio Tinto owns almost 51 per cent of Toronto Stock Exchange-listed Turquoise Hill and is trying to acquire the remaining 49 per cent.

Turquoise Hill owns 66 per cent of Oyu Tolgoi but outsources management of the project to Rio under a structure that has proved a source of friction between Rio, the Mongolian government and minority shareholders in Turquoise Hill.