Atlas goes for Ferraus

Finance

Publishing Date: 27 Jun 2011 10:56am GMT
Author: Mining Journal

Atlas Iron Ltd has made an offer to shareholders in FerrAus Ltd, involving the combination of the two companies’ South East Pilbara assets, followed by a share offer.

Ferraus directors favour the deal deeming it “superior to the unsolicited takeover by Wah Nam International Holdings Ltd”.

Under the proposed deal, Ferraus will issue a total of 159.3 million shares to Atlas in consideration for the iron-ore assets and a share subscription of A$24.3 million (US$25.3 million) or A$0.65/share. This would give Atlas a 38.3% stake in the company, while diluting the Wah Nam’s near 18% interest.

The injection of the Atlas assets would increase FerrAus’ resource of direct shipping ore to 489Mt at 56.7% Fe from the current 331Mt.

In November, The Hong Kong based Wah Nam announced its dual all-scrip bid for Brockman Resources Ltd and Ferraus, attempting to consolidate assets in the region. It has since gained control of Brockman, while Ferraus recently said it would reconsider the bid having first rejected it.

Atlas says it will offer one share for every four Ferraus shares held, a 34% premium to the previous Ferraus closing price.