Business DayCentaurus' current largest shareholder is in favour...

Business Day

Centaurus' current largest shareholder is in favour of the proposed deal that would have Atlas usurp him at a discounted rate. Photo: Reuters

ATLAS Iron seems assured of claiming a 19.9 per cent stake in Centaurus Metals, after the biggest shareholder in Centaurus gave his blessing to a deal that will see him usurped at a discount rate.

Despite offering a 10 per cent premium to the Centaurus share price when lodging the play last week, Atlas's offer to buy 212 million shares at 8.8 cents each was quickly overwhelmed by market enthusiasm, which took the Centaurus share price to 10.5 cents by the close of trading on Friday.

Those fluctuations mean Centaurus shareholders could be approving a sizeable discount for Atlas - close to 20 per cent on current values - when they meet to vote on part of the deal.

Centaurus shareholders do not have a say in approving the first tranche of the deal - worth 110 million shares - but have power to approve or reject the second tranche of 102 million shares.

Centaurus's biggest shareholder is speculator Bill Paterson, whose 60 million shares represent just over seven per cent of the company.

The deal would see Atlas overtake Mr Paterson as the biggest shareholder at a discount rate, yet Mr Paterson urged shareholders to vote in support of the deal.

''I support what has happened, I think it brings to the equation an increased likelihood that Centaurus will export some of their ore and I'm confident they will have a much increased resource when they are finished their drilling,'' he told Businessday. ''I'm very bullish about the management and their capabilities.''

Centaurus managing director Darren Gordon - the second biggest shareholder - said he was confident shareholders would embrace the Atlas play.

''The share price was around eight cents for two months, and you could say the Atlas investment has credentialised our stock,'' he said.

''They are the ones that have created that additional value for shareholders.''

Centaurus has a cluster of iron-ore projects in Brazil, which will be developed faster using the cash generated by the Atlas deal.

Purchase of the stake should be finalised by late September.

Atlas's push into Brazil came in the same week the company warned that the Gillard government's new taxes on mining and carbon emissions were forcing it to look overseas for opportunities.

In June, Atlas launched a takeover of Pilbara iron-ore aspirant FerrAus.