Oh dear, things are not all that cosy between Andrew ‘Twiggy’ Forrest and Gina Rinehart.
Ms Rinehart’s company, Hancock Prospecting had seen off the first bidder for Atlas Iron in the shape of Mineral Deposits and the market had thought that the other big recent buyer, Forrest’s Fortescue Metals would probably sell into the bid.
Hancock, through a subsidiary, is offering 4.2 cents cash for each Atlas share, which values the company around $390 million against the $280 million all paper offer from Mineral Resources which has been dropped.
But in a statement on Tuesday afternoon, Forrest’s company has tossed a bomb at Ms Rinehart’s bid with a subsidiary of Fortescue Metals claiming the bidder’s statement from Redstone Corporation, a subsidiary of Hancock Prospecting, contains “misleading statements and material omissions”.
The Fortescue subsidiary, known as NCZ Investments, has sought interim orders from the Takeovers Panel that Redstone be restrained from dispatching its bidders statement, and that both Redstone and Mrs Rinehart’s Hancock Prospecting be precluded from acquiring, directly or indirectly, any more shares in Atlas until "further and corrective disclosure is released".
The Takeovers Panel statement said NCZ claimed that Redstone’s bidder’s statement, which was released to the ASX last week, contained "misleading statements and material omissions regarding Redstone’s intentions in relation to Atlas’s business, assets and employees and Redstone’s ability to achieve those intentions".
The panel said NCZ had claimed the bidder’s statement contained "misleading statements about the merits, terms and operations of Redstone’s takeover bid".
NCZ also alleged that the bidder’s statement contained material omissions regarding the implications of Redstone’s takeover bid for Atlas’ term loan B facility, and Hancock’s intentions regarding the financing of the repayment of that facility.
Fortescue’s subsidiary claimed that the "combined operation of the identified misleading statements and omissions and the structure of Redstone’s bid has a coercive effect on Atlas shareholders to accept the bid (or sell on-market potentially to Redstone)".
In a short statement issued late Tuesday Hancock Prospecting defended its bid.
"We note the application to the Takeovers Panel. We will be talking to the Panel to explain our position. We are confident that our proposal is a good offer and we look forward to getting our offer to all Atlas shareholders," Hancock said.
