Fortescue shares jump as Todd Corporation accepts Red Hawk takeover offer
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More news: Fortescue shares climbed in morning trade after the mining group secured a majority stake in acquisition target Red Hawk Mining, with the ASX small cap's largest shareholder Todd Corporation accepting the $254 million takeover offer.
Fortescue shares were up 2.2% to $18.69 by 11am AEDT, having slumped by around 35% over the last 12 months.
Red Hawk shares lifted 0.4% to $1.20, extending gains of more than 45% over the past month.
Fortescue gains majority interest in Red Hawk Mining
The news: Mining giant Fortescue has secured a majority interest in iron ore firm Red Hawk Mining, having had its $254 million takeover offer accepted by the company's largest shareholder, Tio, a subsidiary of New Zealand investing group Todd Corporation.
The numbers: Fortescue, through its wholly owned subsidiary FMG Pilbara, now holds a 66.23% stake in Red Hawk. Todd Corporation, which had an interest of 60.71% of Red Hawk's issued capital at 24 January, accepted FMG Pilbara's offer of $1.05 per share.
The miner's proposal, tabled last month, increases to $1.20 per share if FMG Pilbara acquires a 75% stake, or more, within seven days by way of an off-market takeover bid.
The increased offer price becomes payable should FMG Pilbara increase its shareholding to 75% by 7pm AEDT today.
The context: Red Hawk's board continues to unanimously recommend that its shareholders accept the offer at either the base price or the increased offer price if relevant.
Each of Red Hawk's directors intend to accept the offer.
ASX small cap Red Hawk is the owner of the Blacksmith iron ore project, an undeveloped iron ore project located 30km west of Fortescue's Solomon operations in Western Australia.
The source: ASX announcement
