The fight for Atlas Iron isn’t over for Fortescue Metals. The company’s subsidiary has submitted an application to the Australian Takeovers Panel in hopes of stopping Redstone in its tracks.
NCZ has asked the Australian Takeovers Panel to stop Hancock Prospecting subsidiary Redstone from dispatching its bidder’s statement to Atlas shareholders.
Redstone already owns a 19.96-percent stake in Atlas, and NCZ has also asked for both Hancock and Redstone to be prevented from acquiring further shares in Atlas Iron.
Redstone, run by Australian mining mogul Gina Rinehart, made a AU$390-million takeover bid for Atlas earlier this month. Following Redstone’s bid, Atlas takeover competitor Mineral Resources (ASX:MIN) fell to the wayside, narrowing the contest of wills and wallets down to Redstone and Fortescue.
According to NCZ’s submission to the Takeovers Panel, Redstone’s bidder’s statement has “misleading statements and material omissions” regarding the company’s intentions towards Atlas’ business.
NCZ also alleges that the bidder’s statement has misleading statements about the merits of Redstone’s takeover bid, and makes material omissions regarding the implications Redstone’s takeover bid would have for Atlas’ Term Loan B Facility, and how Hancock would finance the facility’s repayment.
In the submission, NCZ states that the combination of misleading statements and omissions have a “coercive effect on Atlas shareholders to accept the bid.” The Fortescue subsidiary has requested that Redstone be unable to dispatch its bidder’s statement and release any further information about the bid while the panel weighs in on the application.
It has also requested that Redstone provide “corrective disclosure” through a replacement bidder’s statement, along with canceling and unwinding any acquisitions of Atlas shares by Hancock, Redstone or their associates, as NCZ feels the “market was misinformed.”
The panel has made no comment regarding the application, nor has it made any decision regarding proceedings.
The fight for Atlas began earlier this month, when Fortescue picked up a 19.9-percent interest in the company, meddling with a merger agreement made by Mineral Resources and Atlas in April. Just a short time later, Hancock bought its 19.96-percent interest in Atlas, fueling a three-way tug of war.
Atlas has gained attention from the major mining companies through its stake in joint venture North West Infrastructure, which has development plans for two new port berths at Port Hedland. The port’s current capacity is 13 million tonnes, and the expansion plans would push that number to 50 million.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.