Atlas Iron Limited (ASX: AGO), the embattled West Australian iron ore miner, revealed this morning that its board has recommended the takeover offer from Gina Rinehart‘s Hancock Prospecting.
Redstone Corporation Pty Ltd is owned by Rinehart’s Hancock Prospecting. Earlier this month, Redstone lodged an off-market takeover bid valuing Atlas at 4.2 cents per share.
In April, fellow West Australian mining business Mineral Resources Ltd (ASX: MIN) had lodged a bid via a scheme of arrangement, which would see Atlas shareholders receive one Mineral Resources share for every 571 Atlas shares they owned.
However, upon receipt of the Hancock offer, Mineral Resources’ scheme offer was withdrawn and Mineral Resources said it would not make a counterproposal.
Another big iron ore miner, Fortescue Metals Group Limited (ASX: FMG), is believed to be circling Atlas after it acquired a near 20% stake in the company (which is a potential blocking stake).
Atlas is a valuable company because it has Pilbara iron ore resources of one billion tonnes and an arrangement to ship 13 million tonnes per year from Utah Point, which has been reserved for smaller miners.
Over the past month shares of Atlas have risen from 3 cents to 4.3 cents, slightly above the price of the Hancock offer. However, since 2014, Atlas shares have fallen from north of $1.
It remains to be seen if Fortescue’s billionaire Andrew Forrest or Hancock’s Gina Rinehart will win the battle for Atlas. But neither of these mining magnates have a habit of giving up easily.
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