Small WA Iron ore miner Atlas Iron has given its first suitor, Mineral Resources three business days to match the all cash offer from Hancock Prospecting.
Billionaire Gina Rinehart’s Hancock Prospecting revealed its 4.2 cents a share (or $390 million cash) bid on Monday afternoon – the second offer for Atlas after the all share bid in April from Mineral Deposits which initially valued Atlas at 3.2 cents a share.
Hancock said last week it had built up a 19.96% stake in Atlas a day or two after Fortescue Metals revealed it had bought 19.9% holding in Atlas, a stake large enough to block Mineral Resources’ offer and to stop Hancock moving to the 90% compulsory buyout level for non-accepting shareholders.
Shares in Atlas jumped 22 per cent to 4.4 cents on Monday, slightly above the Hancock bid value, suggesting the market anticipates a potentially higher bid. They closed at the same level on Tuesday.
Atlas directors said in a statement yesterday morning that they maintained their existing recommendation in favour of the Mineral Resources offer until the company had had an opportunity to make a counter proposal. Atlas shareholders were told to take no action.
Quite a few Atlas shareholders though have taken action – around 40% at least – those whose shares now are held by the Rinehart and Fortescue companies (ether directly bought or under cash settled swaps, a form of financial derivative).
Those shares were all bought around 4 cents a share, so that tells us the cash offer from the Rinehart companies has a very good chance and there is no point in Mineral Deposits offering more shares.
