The Rio Tinto mine in Boron, California
The Rio Tinto logo is displayed on a visitor's helmet at a borates mine in Boron, California, U.S., November 15, 2019.

Turquoise Hill Resources Ltd on Monday rejected an offer by majority shareholder Rio Tinto Ltd to buy the 49% stake it doesn't already own for $2.7 billion, as it did not reflect the Canadian company's full and fair value.

After Rio Tinto's bid in March, which the global miner hoped would clear the way to direct ownership of the massive Oyu Tolgoi copper-gold mining project in Mongolia, Turquoise Hill appointed an independent committee to determine if C$34 ($26.57) per share was in the best interest of minority shareholders.

"Engagement between the parties has not resulted in a consensus on value and price or in any improved proposal from Rio Tinto," Turquoise Hill said in a statement.

Turquoise Hill added that the committee considered a retreat in the price of copper since the March offer but also said good progress was achieved in recent months on the underground project.

"Rio Tinto is disappointed by the decision of the Special Committee and continues to believe that the terms of the Proposed Transaction would deliver compelling value for Turquoise Hill minority shareholders and provide the certainty of an all-cash offer at an attractive premium," the Anglo-Australian miner said in a statement.

Toronto-listed Turquoise Hill has a market capitalisation of $5.3 billion. Its U.S.-listed shares dropped 8.6% pre-market to $24.

Interim Chief Executive Steve Thibeault said Turquoise Hill's funding agreement with Rio Tinto remained in effect and that the company expected it to provide sufficient liquidity to meet funding requirements.

In May, the Canadian company said Rio Tinto would provide an interim debt funding of up to $400 million.

Rio's offer had seen opposition from major Turquoise Hill shareholders, including activist investor Pentwater Capital Management, the largest minority shareholder with a 10% stake, who said the offer was too low.

Pentwater Capital was not immediately available to comment.

($1 = 1.2795 Canadian dollars)

(Editing by Subhranshu Sahu and Emelia Sithole-Matarise)