Atlas Iron’s board has unanimously recommended shareholders accept Hancock Prospecting’s $390 million offer for the company in the absence of a superior offer.
The junior miner has been the focus of heated takeover bids over the last few months since Mineral Resources (MinRes) first announced its attempt to buy the company for $280 million in April.
Fortescue Metals Group purchased 19 per cent of Atlas at the start of June, complicating MinRes’s takeover plans, and Gina Rinehart-owned Hancock Prospecting joined in a week later, firstly by purchasing 19.96 per cent of Atlas, and then — in a move that caused MinRes to bow out — offering $390 million to purchase the company outright through subsidiary Redstone Corporation.
It has been argued that the investments in the beleaguered company are tied to Atlas’s supposed shipping rights, which could see it increase capacity from 12Mt/y to 50Mt/y through the development of two berths at Port Hedland as part of the North West Infrastructure (NWI) joint venture.
The debate over whether or not Atlas is actually eligible to claim these port rights has been contested by the Western Australian Government.
Atlas also announced today that it will suspend iron ore processing at its Mt Dove project and reduce its mining rate at Mt Webber from 9Mt/y to around 7Mt/y due to challenging market conditions. Both changes are expected to take effect from late July.