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Fortescue gains 19.9% stake in Atlas Iron

Fortescue gains 19.9% stake in Atlas Iron

Photo by Bloomberg

7th June 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has taken a 19.9% shareholding in fellow-listed Atlas Iron, and has revealed that it would not support a proposed takeover of Atlas by Mineral Resources (MinRes).

Fortescue on Thursday revealed that it had acquired a 15% shareholding in Atlas, at a price of 4c a share, and had an economic interest through a cash settled swap relating to notional shares equivalent to around 4.9% of Atlas’ ordinary shares.

As a result, Fortescue had an aggregate physical and economic interest of 19.9% in Atlas.

While Fortescue on Thursday said the company did not intend to support the proposed takeover offer from MinRes on its current terms, it did reserve the right to do so.

MinRes struck a merger deal with Atlas in April, offering shareholders one new MinRes share for every 571 Atlas shares held. Based on the closing price of both companies’ share price before the offer, the offer valued Atlas shares at 3.02c a share, a 59% premium to the company’s last closing price.

MinRes argued that the amalgamation of the companies' iron-ore mining assets in the Pilbara would enable the combined company to exploit greater synergies and economies of scale, which would drive down costs and better position the consolidated iron-ore business in the new environment of lower global prices for low-grade iron-ore.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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