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Expert backs Hancock offer for Atlas

Expert backs Hancock offer for Atlas

Photo by Bloomberg

16th July 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – An independent expert has found that Hancock Prospecting’s offer for ASX-listed Atlas Iron is both fair and reasonable, with Atlas on Monday urging shareholders to accept the offer.

Nonexecutive chairperson Eugene Davis told shareholders that the offer from Hancock was an excellent opportunity for shareholders to realise value for their investment in Atlas, noting that the cash offer represented a 121% premium to the company’s losing price prior to the announcement of a takeover offer from fellow-listed Mineral Resources.

The 4.2c a share trumped an earlier takeover offer from Mineral Resources, which had offered Atlas shareholders one new share for every 571 Atlas shares held.

Davis told shareholders on Monday that despite efforts by Atlas management, the company was currently running at a loss, with the miner earlier warning of a non-cash impairment of between A$75-million and A$100-million for the 2018 financial year.

Atlas has also conducted a detailed strategic review with the assistance of independent advisers, to examine a number of alternative options, including debt refinancing, equity raising, and asset sales to create value. However, the miner said that with the ongoing difficult market conditions for low-grade iron-ore, the company believed the Hancock offer was in the best interest of shareholders.

The Atlas board has now unanimously recommended that shareholders accept the Hancock offer, in the absence of a superior proposal.

Hancock’s offer will close on August 3, unless withdrawn or extended.

Edited by Creamer Media Reporter

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