Fortescue to acquire Red Hawk Mining for $254m
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The news: Mining giant Fortescue has moved to acquire Pilbara-focused iron ore firm Red Hawk Mining for $254 million.
The numbers: Fortescue, through its wholly owned subsidiary FMG Pilbara, has proposed to buy all of Red Hawk's shares for $1.05 per share, increasing 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 offer represents a 29% premium to Red Hawk's 30-day volume weighted average price (VWAP) to 24 January. The increased offer price would represent a 48% premium to Red Hawk's 30-day VWAP.
The context: Red Hawk's board of directors has received an independent expert's report concluding that the offer is fair and reasonable to its shareholders.
Red Hawk's board has unanimously recommended that its shareholders accept the offer at both the offer price, and the increased price if relevant, in the absence of a superior proposal.
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
