MinRes bows out of Atlas Iron takeover battle

Mining News - Mineral Resources is out of the tussle for control of junior miner Atlas Iron after it decided not to make a counter offer to the $390 million bid by a Hancock Prospecting subsidiary.
Redstone Corporation’s 4.2 cent a share cash bid for Atlas on Monday was a substantial increase on the $280 million all-scrip offer made by MinRes in April.
This difference proved too much for MinRes; Atlas yesterday gave the Chris Ellison-led company three days to deliver a counter proposal, but it didn’t need them to come to today’s decision.
“Mineral Resources has determined that it will not make a counter proposal to the Redstone offer,” the company said via the ASX.
Atlas’ board had recommended the MinRes offer to shareholders, so will now likely do the same to the beefed up bid from Redstone.
A hurdle for Redstone may be Fortescue Metals Group, which owns a 19.9 per cent stake in Atlas after it bolstered its interest in the company by 15 per cent through a share purchase this month.
Hancock Prospecting also holds 19.96 per cent of Atlas, a stake it acquired a week after Fortescue increased its ownership.
Tad Watroba, Hancock executive director, said on Monday that Atlas’ assets offered potential long-term benefits alongside other assets in the Gina Rinehart-chaired company’s portfolio.
“There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations,” Watroba said.
“If we obtain control of Atlas, we intend to conduct a strategic review to better understand the most appropriate time and means to develop and integrate Atlas into the existing operations of the Hancock Group.”
Atlas Iron’s board advised shareholders to take no action in relation to the Hancock offer, which is scheduled to open next month.