The Fortescue Ltd (ASX: FMG) share price is up close to 2% after the ASX mining share revealed how much progress it’s making on the acquisition.
Fortescue recently announced the acquisition of iron ore business Red Hawk Mining Ltd (ASX: RHK) and it has been steadily buying shares of the business. Fortescue is aiming to by 100% of the business.
Acquisition milestone
After the acceptance of Red Hawk’s largest shareholder (TIO (NZ) Limited) into the offer, Fortescue now holds a majority interest in Red Hawk of 66.2%.
The increased offer price of $1.20 per Red Hawk share is payable if Fortescue reaches an interest of 75% or more by 7pm on 4 February 2025.
If the offer becomes unconditional, Red Hawk shareholders who have accepted the offer will be paid within 10 business days.
Any shareholder that has already accepted the offer will automatically receive the higher increased offer price if the increased offer condition (of 75% by 4 February) is met.
Red Hawk’s board of directors continues to unanimously recommend that Red Hawk shareholders accept the offer as long as there isn’t a superior proposal and it’s subject to the independent expert continuing view the offer as reasonable.
My thoughts on the Fortescue share price
Today’s valuation movement of the ASX iron ore share may have been influenced by a temporary pause on the trade war between the US and Canada and Mexico.
Investors would probably prefer there are no new tariffs and that businesses can continue to trade with the US without any barriers or additional burdens.
What’s going to happen next? No-one knows, so I’d try not to base too much of an investment decision around any further US economic or political moves.
Fortescue shares are likely to be impacted by changes in the iron ore price because it’s the key commodity the business. How will China respond to the tariffs? It’s hard to say.
Unless the Fortescue share price were to drop significantly, it’s not the sort of investment I’d want to make because it’d be a bit like the flip of a coin about what happens next.
For now, I think it makes sense for me to look at other ASX dividend shares.
