An Australian iron ore producer looks set to be at the centre of a multi-million-dollar bidding war, as one of the most successful privately owned companies has increased an offer to buy out the company.
Redstone Corporation Pty Ltd, a wholly owned subsidiary of Hancock prospecting, has announce that it has submitted an all-cash offer to acquire all of the ordinary shares in Atlas Iron Limited.
The offer, which would see Redstone buy out the remaining shares from its existing 19% stake, has been valued at $0.042 pe share, which Reuters calculates at $290 million.
The company states that this is a “41% premium” to the implied value of an earlier bid for the company by Mineral Resources Limited.
Minera Resources announced in April this year that it would look to acquire Atlas for a deal worth $215 million, which has now been trumped by the latest offer.
At the time it was reported that Atlas directors unanimously recommended that shareholders vote in favor of the scheme, but Mineral Resource has said in statement that it will assess its intention to consider its position and will advise its intentions in due course.
“We see long term synergies between the Atlas assets and the other iron ore interests within the Hancock Group,” said Tad Watroba, Executive Director of Hancock.
“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.”
“The remainder of the Atlas resources could serve to extend the life of existing Hancock iron interests”