Battle for Atlas Iron heats up

The prospective takeover of Atlas Iron has turned into a battle of the billionaires with Andrew Forrest’s Fortescue Metals challenging the planned takeover of Atlas by a company controlled by fellow billionaire Gina Rinehart.

Challenging the takeover through a subsidiary NCZ Investments, Fortescue has accused Redstone Corporation, which is owned by Mrs Rinehart’s company Hancock Prospecting, of misinforming the market through its bidder’s statement.

It has alleged that Redstone made “misleading statements and material omissions regarding [its] intentions in relation to Atlas’s business, assets and employees and Redstone’s ability to achieve those intentions.”

The Atlas Board last week recommended that shareholders approve Ms Rinehart’s $390 million offer. However, that recommendation depends on whether someone else makes a better offer, and is subject to an independent expert concluding Ms Rinehart’s offer is “fair and reasonable”.

Fortescue Metals owns a 19.9 per cent stake in Atlas. Ms Rinehart owns a similar stake in Atlas, totalling 19.96 per cent.

Atlas Iron would be a strategically important asset for either company because it operates in the Pilbara and has rights to berths at Port Hedland, the world’s biggest iron ore port.

Fortescue has asked the Takeovers Panel to intervene and make orders preventing Hancock from dispatching its bidder’s statement or releasing any further information to the market while the Panel considers its application. It has also asked for Hancock to be restricted from acquiring any further shares in Atlas until “further corrective disclosure is released”.

Hancock Prospecting’s statement said it would talk to the Panel to explain its position.



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