Andrew Forrest just turned a blowtorch on fellow billionaire Gina Rinehart's bid for Atlas Iron

Kirill Kudryavtsev/AFP/Getty Images
  • Andrew Forrest’s Fortescue Metals says Gina Rinehart’s company has made “misleading statements” regarding its takeover bid for Atlas Iron.
  • He’s referred the matter to the Takeover Panels.
  • He wants Rinehart’s bid to be restrained from dispatching its bidder’s statement and releasing any other information regarding the bid while the panel considers the application.

The battle of the billionaires for junior iron ore miner Atlas Iron just became more than a simple takeover joust.

NCZ Investments, a subsidiary of Andrew ‘Twiggy’ Forrest’s Fortescue Metals, just accused Gina Rinehart’s Redstone Corporation, owned by her Hancock Prospecting company, of misleading statements.

Forrest has taken his complaint to the official Takeovers Panel, saying Rinehart’s company has made material omissions in relation to Atlas’s business, assets and employees.

Rinehart has made an all-cash $390 million offer for 100% of Atlas Iron, a premium of around 41% on a previous offer from miner Mineral Resources, which has since departed the battlefield, leaving just two suitors.

Forrest’s Fortescue Metals has built a 19.9% holding in Atlas, enough to block any takeover.

And now it’s asking the Takeovers Panel to restrain Rinehart’s Redstone from dispatching its bidder’s statement and releasing any other information regarding the bid while the panel considers the application.

The panel says NCZ Investments submits that Redstone’s bidder’s statement has:

  • misleading statements and material omissions regarding Redstone’s intentions in relation to Atlas’s business, assets and employees and Redstone’s ability to achieve those intentions
  • material omissions regarding the implications of Redstone’s takeover bid for Atlas’s Term Loan B Facility and Hancock Prospecting’s intentions in respect of financing the repayment of that facility and
  • misleading statements about the merits, terms and operation of Redstone’s takeover bid.

The suitors see upside in consolidating the Atlas assets, which have high iron content ore, in the Pilbara into their own.

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

“There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations.”

Atlas Iron was an early victim of falling iron ore prices. In April 2015, it announced it was mothballing its mines because it was costing more to dig up ore than buyers were willing to pay.

The crash in iron ore prices was then driven by softening Chinese demand. Since then the company has restructured, global prices have surged and the miner is cash flow positive.

In the latest half year results, Atlas posted a statutory net loss after tax of $21 million. Sales were $308 million, down from $498 million.

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