Atlas Iron’s directors have unanimously recommended shareholders accept Hancock Prospecting subsidiary Redstone Corporation’s $390 million takeover offer in a company target statement.
The statement states that Atlas’ directors accept the offer of $0.0042 cash per share in the absence of a superior proposal, stating that it “provides certainty of value” and represents a “compelling premium” to the company’s historical trading values.
Independent accounting expert BDO Corporate Finance also found that Hancock’s offer price offer was above the fair value of Atlas’s shares.
The recommendation is in keeping with previous statements made by the board, who had cited the superiority of the Hancock offer over Mineral Resources’ earlier bid of $280 million, but it had also advised shareholders to take no action until an independent report and target statement were released.
The Hancock offer represents a 121 per cent premium over Atlas’ closing price of $1.90 per share as of April 4 this year, the day before MinRes made its initial offer.
Atlas also conducted a “detailed strategic review” with independent advisors, which examined a number of alternatives to accepting the offer, but in the end it was decided the takeover was the best scenario to help Atlas with its current financial difficulties and avoid potential insolvency.
Two of the company’s mines, Wodgina and Abydos, were closed in May and October last year, and its only operational mine left is Mt Webber in the Pilbara, Western Australia, which is forecast to close in 2022.
Acceptances from shareholders must be received by August 3. The full target statement can be read here.