CA - Turquoise Hill investor SailingStone opposes Rio Tinto takeover bid

SailingStone Capital Partners, Turquoise Hill Resources' ( NYSE: TRQ ) fifth largest shareholder, said Friday it will vote against Rio Tinto's ( NYSE: RIO ) proposed C$43/share takeover offer.

The offer that a special committee of independent directors at Turquoise Hill ( TRQ ) recommended to minority shareholders "significantly undervalued" the company, SailingStone said, adding that the offer tries to take advantage of the "material governance failures" created by independent directors of both companies over the last decade.

California-based SailingStone owns a 2.2% stake in Turquoise Hill ( TRQ ).

Pentwater Capital Management also has argued that Rio Tinto's ( RIO ) bid undervalues Turquoise Hill ( TRQ ).

Rio Tinto ( RIO ) agreed on September 1 to buy the 49% it does not already own in Turquoise Hill ( TRQ ) after sweetening an initial offer by ~20%, which CEO Jakob Stausholm has said is the company's final offer .

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