Takeover talk sends Atlas Iron into a trading halt
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Atlas Iron, which was an an early victim of falling iron ore prices, has gone into a trading halt with reports of an impending takeover offer.
The company says it is preparing an announcement regarding “media speculation”.
Mineral Resources, with a significant lithium business, is reported to be in talks with the iron ore miner on a takeover based on an all-share deal. Mineral Resources went into a trading half last Thursday.
The Financial Review’s Street Talk understands the two companies were locked in takeover talks over the weekend.
Atlas Iron in April 2015 announced it was mothballing its mines because it was costing more to dig up the ore than buyers were willing to pay.
The crash in iron ore prices was then driven by softening Chinese demand. Since then the company has restructured, global prices have surged and the miner is cash flow positive.
In the latest half year results, Atlas posted a statutory net loss after tax of $21 million. Sales were $308 million, down from $498 million.
Over the same time, Mineral Resources increased revenue by 22 per cent to $962 million and net profit after tax by 16 per cent to $163 million.