MinRes bid rebels told Atlas faces extinction
<img src="
https://images.thewest.com.au/asset...mb.png?imwidth=640&amp;amp;impolicy=.auto" class="css-1v1jjkr" />Mineral Resources boss Chris Ellison has warned Atlas Iron shareholders planning to vote against his takeover offer for the miner that their company is on a countdown to extinction and a rival bid is unlikely.
MinRes announced a $280 million, all-scrip bid for Atlas on Monday, which would give its shareholders one new MinRes share for every 571 Atlas shares they hold.
The offer values Atlas about 3¢-a-share, representing a 59 per cent premium to its last traded price of 1.9¢ before the offer was announced.
Atlas’ board and management have welcomed the deal and recommended shareholders accept it in the absence of a superior offer.
But a significant contingent of the company’s legion of small, retail shareholders have taken to online investor forums to voice their opposition and formed an action group to fight the deal.
Speaking on an analyst and media conference call yesterday, Mr Ellison described Atlas as being in “palliative care” because of the big discounts it had been forced to accept on its low-grade ore combined with high operating costs.
“They’ve been trading at a loss for the past three months and I don’t see iron ore doing anything differently in the next six to 12 months,” he said.
“If they continually lose money, they have to draw a line in the sand.”
Mr Ellison said Atlas had been managed well but did not have the capital or balance sheet strength to expand.
He accepted some Atlas shareholders had paid a lot more for their shares, but believed management had extracted a good deal.
Mr Ellison said other bigger iron ore players considered Atlas’ deposits as stranded and uneconomic, but it made sense for MinRes because of its proposed Bulk Ore Shuttle System, which could link the deposits to Port Hedland and cut costs.
Atlas retail shareholder Shane Taylor, who has formed AGO United with other small shareholders to fight the tie-up, described the 3¢ offer as a “kick in the face” given the benefits MinRes would derive from the deal in the form of one billion tonnes of resources, 13Mtpa in port capacity and $500 million in tax loss credits.
He believed Atlas was worth 9¢ to 11¢ a share, but suggested shareholders would consider an offer valued at 5¢ to 6¢.
.... If it is not MIN, then whoever it is buying must not think we "face extinction" ... as most of us don't ... pfft !
