Atlas Iron’s board has unanimously backed Gina Rinehart’s $390 million takeover bid for the junior miner.
Ms Rinehart’s Hancock Prospecting had emerged last week as the likely winner of the battle for Atlas, trumping a previously recommended bid by mid-tier player Mineral Resources.
Atlas Iron recommends shareholders accept the Hancock offer, subject to an independent report stating whether the offer is fair and reasonable, and says it will lodge its formal response to the bid in coming weeks.
The company’s assets include rights to potentially valuable undeveloped port capacity in Port Hedland.
Mineral Resources mounted the first offer for Atlas in April with a $280 million bid, before Fortescue and Hancock each picked up a near-20 per cent stake in the iron ore company.
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The board’s recommendation comes only days after Andrew Forrest’s Fortescue Metals sought to have Ms Rinehart’s takeover attempt halted, alleging there are misleading statements and omissions in her company’s bid.
Fortescue subsidiary NCZ on Tuesday went to the Takeovers Panel asking that Redstone – a subsidiary of Ms Rinehart’s Hancock Prospecting – be prevented from advancing its takeover of Atlas or acquiring any more shares in the junior miner.
It claimed that Redstone’s bidder’s statement has “misleading statements and material omissions” about its intentions towards Atlas’s business, assets and employees.
Atlas Iron shares have recently jumped amid the escalating bidding war, and last traded at 4.3 cents.