Fortescue shares gain on Red Hawk takeover progress
Make us a preferred source
Make us a preferred source on Google
More news: Fortescue shares lifted at the start of trading on the ASX, after the Red Hawk Mining's two largest shareholders Todd Corporation and OCJ Investment Australia accepted a takeover offer from the metal mining giant.
Fortescue shares were up 2.66% to $19.11 by 10:35am AEDT, having lowered more than 30% over the last 12 months. The wider materials sector was up 1.47%.
Shares in Red Hawk, which Fortescue intends to delist after the acquisition is completed, added 0.8% to $1.20.
Fortescue lifts price for Red Hawk takeover
The news: Fortescue Metals Group has lifted its offer price for the takeover of iron ore firm Red Hawk Mining, triggered by the acquisition of more than 75% stake in the target company.
The numbers: Fortescue now holds 78% interest in Red Hawk after the two largest shareholders of the company — Todd Corporation and OCJ Investment Australia — both accepted the offer.
It triggered the increase in the offer price to $1.20 a share from $1.05 previously, taking the overall takeover cost to $254 million.
The context: Australia’s third-biggest iron ore exporter announced the takeover offer earlier this week, in a move to acquire Red Hawk’s undeveloped Blacksmith iron ore project, located 30km west of Fortescue's Solomon operations in Western Australia.
It will make the offer unconditional by 17 February, with Red Hawk shareholders to be paid within 10 business days of that. Shareholders that have accepted the offer will receive the benefit of the increased offer price.
Fortescue intends to delist Red Hawk after the acquisition is completed.
The source: ASX announcement
