Iron ore junior Atlas Iron has recommended shareholders accept a $390 million takeover bid from Gina Rinehart’s Hancock Prospecting, in the latest turn of a hotly-contested takeover battle.
Rinehart’s offer, made through Hancock subsidiary Redstone on Monday, blew Mineral Resources’ initial offer of $280 million out of the water.
But Atlas’ share price continues to trade above the valuation provided by Rinehart’s offer, suggesting funds believe there could be more to come in what has been a highly competitive bidding process.
As recently as the start of June, Mineral Resources looked to be the only suitor for Atlas.
But Hancock acquired a stake of just under 20% in Atlas last week, following a similar move made by Fortescue in the first week of the month.
Mineral Resources relinquished Atlas from contractual obligations preventing it from speaking with an alternative suitor when Fortescue made its approach.
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 on whether Atlas’ berth access at Port Hedland’s Utah Point would be forwarded to a buyer, however, and to berth space which has been earmarked for development near Hancock’s Roy Hill berths at Port Hedland.
Under the government’s current policy is for that port space to be reserved for junior miners, which Fortescue and 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.