June 18, 2018 / 4:23 AM / a year ago

Gina Rinehart's $290 million bid heats up Atlas Iron tussle

MELBOURNE (Reuters) - Australian billionaire Gina Rinehart’s Hancock Prospecting lodged a A$390 million ($290 million) bid for Atlas Iron Ltd on Monday, potentially setting off a three-way struggle for the small iron ore miner.

The offer trounces an earlier A$280.2 million bid in April from mining services group Mineral Resources, while world No. 4 iron ore miner Fortescue Metals disclosed earlier this month it had built up a 19.9 percent stake in Atlas.

Atlas operates in the iron ore rich Pilbara region of Western Australia and has undeveloped tenements that could potentially be brought into production with a larger partner.

Hancock, which said last week it had built up a 19.96 percent stake in Atlas, offered A$0.042 per share for the miner, representing a premium of about 17 percent to Friday’s close.

“We see long term synergies between the Atlas assets and the other iron ore interests within the Hancock Group,” said Hancock executive director Tad Watroba in a statement.

Hancock, which owns the Roy Hill iron ore mine, is hoping to use the ore for blending and to potentially extend the life of the company’s existing mines.

Fortescue, one-third owned by billionaire Andrew Forrest, said it was considering its options.

“Fortescue notes today’s announcement from Atlas Iron. We will continue to assess our strategic options,” Fortescue CEO Elizabeth Gaines said in a statement.

Shares in Atlas jumped 22 percent to A$0.044, slightly above the bid value, suggesting the market anticipates a potential higher bid.

Atlas shares fell sharply last week, after it was notified that its North West Infrastructure (NWI) joint venture did not have priority rights to develop certain shipping berths at Port Hedland in Western Australia.

NWI, a joint venture with Brockman Mining and FerrAus, has the capacity to export 50 million tonnes of iron ore a year from the South-West Creek project at Port Hedland.

Reporting by Melanie Burton; additional reporting by Ambar Warrick and Susan Mathew in Bengaluru; Editing by Tom Hogue and Richard Pullin

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