Atlas Iron battle heats up with Rinehart's $390m takeover bid

Atlas Iron battle heats up with Rinehart's $390m takeover bid

Mon, 18/06/2018 - 12:10
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Atlas

Atlas Iron's Pilbara operations have caught the interest of Mineral Resources, FMG and Hancock Prospecting. Photo: Reuters

Gina Rinehart’s Hancock Prospecting has moved to acquire Atlas Iron, offering $390 million for the in-demand iron ore junior.

Atlas announced to the ASX today that Hancock Prospecting subsidiary Redstone Corporation had offered 4.2 cents for each share in Atlas, trumping a $280 million bid by Mineral Resources to acquire the company.

The offer is all cash and unconditional, according to a bidder’s statement lodged with the ASX.

Hancock executive director Ted Watroba said Atlas’ assets had long-term synergies with the company’s iron ore portfolio, which includes stakes in operating iron ore mines Hope Downs and Roy Hill.

Hancock also holds a range of exploration tenements in the Pilbara, including its Mulga Downs proejct

“There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations,” Mr Watroba said.

“If we obtain control of Atlas, we intend to conduct a strategic review to better understand the most appropriate time and means to develop and integrate Atlas into the existing operations of the Hancock Group.”

Mr Watroba said some of Atlas’ deposits had characteristics that were complementary to the production profile of Hancock, of around 62 per cent iron content.

“The remainder of the Atlas resources could serve to extend the life of existing Hancock iron ore interests.”

Last week, Ms Rinehart waded into the takeover battle for Atlas, disclosing a 19.96 per cent stake in the company via Hancock Prospecting.

Fortescue Metals Group also built up a 19.9 per cent stake in Atlas in June, giving it enough clout to potentially block Mineral Resources’ takeover bid.

Fortescue, one-third owned by billionaire Andrew Forrest, said it was considering its options.

"Fortescue notes today's announcement from Atlas Iron. We will continue to assess our strategic options," chief executive Elizabeth Gaines said in a statement.

Shares in Atlas fell sharply last week, after it was notified that its North West Infrastructure (NWI) joint venture did not have priority rights to develop certain shipping berths at Port Hedland in Western Australia.

NWI, which is a joint venture with Brockman Mining and FerrAus, has the capacity to export 50 million tonnes per annum (mtpa) of iron ore from the South-West Creek project located at Port Hedland.

--with Reuters