Freight Rail

Rinehart details Atlas plans after Twiggy questions bid

Roy Hill train. Photo: Roy Hill

Iron ore billionaire Gina Rinehart has provided further details on her company’s plans for takeover target Atlas Iron, after Fortescue Metals Group founder Andrew ‘Twiggy’ Forrest questioned the validity of Rinehart’s $390 billion bid.

Rinehart’s Hancock Prospecting on Wednesday reportedly provided a more detailed outline of what it plans to do with Atlas, and its $80 billion debt figure.

The outline includes plans for a strategic review of Atlas, and an investigation into whether more port capacity is needed.

The news came a day after multiple reports indicated the federal Takeovers Panel had received notice from Fortescue subsidiary NCZ Investments, arguing Hancock’s takeover bid contained a number of misleading statements.

NCZ reportedly told the Takeovers Panel the bid, which Hancock made through its subsidiary Redstone, contains “misleading statements and material omissions regarding Redstone’s intentions in relation to Atlas’s business, assets and employees and Redstone’s ability to achieve those intentions”.

NCZ holds a 15% share of Atlas Iron, while Redstone has a 19.9% stake.

Redstone’s offer, made on June 18, blew an existing $280 million takeover from Mineral Resources – which has since quit the takeover race – out of the water. As recently as the start of June, Mineral Resources looked to be the only suitor for Atlas.

But after Redstone’s offer, Atlas’ share price continued to trade above even that valuation, suggesting the market anticipated Forrest might make a move to challenge the bid.

Atlas holds iron ore deposits, but also has port capacity at Port Hedland, another extremely valuable resource.

The state government is yet to make a clear ruling over what would happen if a major miner bought Atlas, which uses a pair of berths at Port Hedland’s Utah Point facility, which the state has specifically earmarked for use by junior miners, which Fortescue and Hancock’s Roy Hill are not.

According to AFR, Fortescue founder Twiggy Forrest and Rinehart have a “frosty” relationship and were always unlikely to team up on a bid for Atlas.