Gina convinces Twiggy Forrest to sell out of Atlas with higher cash offer
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It didn’t take long for Gina Rinehart to surpass her target of 87 per cent of Atlas Iron after offering investors more cash to sell out.
The first investor to succumb to the higher offer was Andrew “Twiggy” Forrest’s Fortescue Metals Group (ASX:FMG).
Last Wednesday investors were told that Redstone Corporation, a subsidiary of Ms Rinehart’s Hancock Prospecting, would increase its 4.2c-per-share all-cash offer to 4.6c if it reached a stake of 87 per cent.
The new offer values Atlas at about $442.5 million, compared to $390 million initially, based on the number of shares currently on issue.
By Friday the subsidiary had gone from around 77 per cent to 88.25 per cent.
It was all thanks to iron ore rival Fortescue (ASX:FMG) selling its 11 per cent stake following the announcement of the higher bid.
This sent Atlas shares up around 7 per cent to match the higher offer price on Monday morning.
Fortescue originally tried to block the takeover attempts by Mineral Resources (ASX:MIN) and Ms Rinehart.
NCZ Investments, the Fortescue subsidiary that owned the stake in Atlas, called on the Takeovers Panel to stop Redstone from dispatching its bidder’s statement and releasing any other information.
But the regulator refused to get involved in the battle for control of the struggling junior iron producer.