Gina Rinehart has secured majority control of Atlas Iron as her $390 million cash offer for the loss-making miner was extended late Friday.
Mrs Rinehart’s Hancock Prospecting revealed Friday its stake in the miner had reached 56 per cent as her original offer for the Pilbara miner closed.
“As a result, Redstone’s (a Hancock subsidiary) all-cash offer for the acquisition of shares in Atlas will automatically be extended by a period of 14 days, making August 17 (at 5pm Perth time) the new scheduled closing date of the offer,” the company said in a statement.
The development leaves Andrew Forrest’s Fortescue Metals Group (19.9 per cent) as a minority shareholder in a company controlled by Mrs Rinehart.
It remains unclear whether Fortescue will sell its stake into the Hancock offer or remain on the register in a bid to frustrate Mrs Rinehart’s efforts to gain full control of Atlas, remove it from the ASX and absorb it into her private business empire.
Fortescue could use its stake as a bargaining chip to extract concessions from Hancock in the carve-up of Atlas. However Hancock’s majority holding removes the possibility of Fortescue or any other party launching a rival bid for the company, thereby removing any reason for remaining shareholders not to sell into the existing offer.
Hancock’s chief executive Garry Korte reiterated that the offer was a compelling proposition for Atlas shareholders and urged all remaining shareholders to accept prior to the new scheduled closing date.
He said the company looked forward to working with the Atlas team, its contractors and other stakeholders on a promised “strategic review” once the offer closed.
Atlas became the centre of an intriguing three-way battle for control in June when Hancock emerged with a 19.9 per cent stake in the company just days after Fortescue revealed a similar holding. The respective stakes immediately threw into doubt an existing all-scrip deal between Atlas’ board and Chris Ellison’s Mineral Resources struck in April.
MinRes effectively bowed out of the race by refusing to meet or beat a subsequent superior $390 million cash bid for the company by Hancock.
Atlas’ board has recommended shareholders accept the Hancock offer and an independent report has described it as both fair and reasonable.
Atlas shares closed steady yesterday at the offer price of 4.2c.
AGO Price at posting:
4.2¢ Sentiment: None Disclosure: Held