Gina Rinehart’s Hancock Prospecting has made a 4.2 cents a share cash offer for Atlas Iron – news that saw the company’s shares jump 22.2% to 4.4 cents each as punters speculated that either Fortescue Metals would jump in with a higher offer, or Mineral Resources would lift the terms of its all paper, 3.2 cents a share offer.
The Rinehart offer came a few hours after Atlas Iron sought a trading halt of its shares pending an announcement regarding a “control transaction proposal.”
Gina Rinehart last week joined those vying for control of the company, disclosing a 19.96% stake in Atlas via Hancock Prospecting.
Her offer values Atlas at $390 million against around $280 million for the Mineral Resources offer. Days earlier, Fortescue Metals announced it had built up a 19.9% stake in Atlas, large enough to block Atlas’s planned takeover by Mineral Resources for $280 million, announced in April.
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.
Atlas says it will now consider the proposal along with Mineral Resources’ right to respond with an increased offer.
The Atlas board had previously supported the Mineral Resources offer and a vote on the deal had been expected in July.
Hancock executive director Tad Watroba said Atlas’ assets offered potential long-term benefits alongside other assets in Hancock’s portfolio. "There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations," Mr Watroba said in the bidder’s statement.
"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."
