The battle to take over West Australian mining company Atlas Iron has taken a turn in favour of billionaire mining magnate Gina Rinehart.

The Australian Takeovers Panel ruled on Monday that it would take no action to investigate a takeover bid for Atlas by Redstone Corp, a subsidiary of Rinehart’s Hancock Prospecting. The panel became involved when  Andrew Forrest’s Fortescue Metal Group approached the panel with a claim that Redstone’s bid contained “misleading statements and material omissions”.

Fortescue asked that the panel release interim orders to restrain Redstone from issuing its bidder’s statement. The panel said it would take no further action after negotiations with Redstone resulted in the company agreeing to replace the bidder’s statement it originally issued with one which includes more detail about its intentions for the takeover.

The Australian Takeovers Panel director Allan Bulman said in a statement: “Following discussions with the Panel and ASIC, Redstone has agreed to incorporate disclosures from its supplementary bidder’s statement in a replacement bidder’s statement.”

“Given these stgelopments the Panel concluded there was no reasonable prospect that it would make a declaration of unacceptable circumstances.”

The Takeover Panel is an agency of the Federal Government tasked with resolving disputes which arise during corporate M&A activity.

The decision follows an unconditional cash offer from Redstone to take over Atlas Iron for $390m, which would involve the purchase of all outstanding shares not already owned by Redstone. The Atlas Iron board has already given a unanimous recommendation that shareholders accept Redstone’s offer of 4.2c per share.

The ruling is a serious blow which may end Fortescue’s chances of having a rival bid considered by the Atlas board. Fortescue will need to act quickly before the Redstone bid is formally accepted. The Atlas board has indicated that it will give a formal response to the Redstone bid in the coming weeks.

Neither Fortescue or Redstone have given any specific details on what their plans for Atlas would be if they were to succeed in a takeover. However Fortescue has suggested that it would be interested in creating berths at Port Headland port. The Redstone replacement statement says that it will undertake a strategic review of Atlas operations, including its port facilities. Atlas’ assets include the rights to stgelop port capacity at Port Headland.

Executive Director of Hancock Prospecting Tad Watroba said an acquisition of Atlas would increase the potential value of the asset by combining it with Hancock’s capabilities: “There is potential to unlock value through the future stgelopment of Atlas resources as part of our wider system of operations.

“Some of the Atlas deposits contain elements that have complementary characteristics providing optionality and opportunity to improve the non-iron elements of ore quality further. The remainder of the Atlas resources could serve to extend the life of existing Hancock iron ore interests.”

The Redstone bidder’s statement went on to say that, in the short term, it would maintain Atlas operations as they had been, but would begin looking into disposing of assets it did not consider of “long term strategic value”.

Redstone went on to say that should the takeover be successful, its strategic review would consider expanding or reducing the Atlas workforce, depending on needs, and if workforce numbers needed reducing, they would aim to move employees within the company rather than making layoffs. The bidder’s statement told shareholders that they would be paid cash, promptly, and would be assured of a fixed price. The statement also warned of consequences if the bid was rejected, including uncertainty of Atlas’ future.