Australia’s Fortescue Metals Group (FMG.AX) said on Thursday it has built up a 19.9 percent interest in small iron ore miner Atlas Iron Ltd (AGO.AX), giving it a large enough stake to block a takeover of Atlas by Mineral Resources Ltd (MIN.AX).
Fortescue, the world’s No. 4 iron ore miner, said it would not support the A$280 million ($214 million) takeover of Atlas announced in April on the current deal terms, but said it reserved the right to do so.
Mineral Resources said at the time that the amalgamation of its existing Pilbara iron ore assets with those of Atlas would lead to greater synergies and economies of scale, helping to drive down costs.
Fortescue said it had agreed to buy a 15 percent stake in Atlas at A$0.04 per share, or A$55.7 million. Including a cash settled swap, it will have a total interest in Atlas of 19.9 percent.
Atlas Iron shares have risen 3.2 percent in the year to Wednesday’s close and were trading 4.7 percent higher at A$0.0335 at 0209 GMT on Thursday.
The broader market was up 0.7 percent.
Source: Reuters.com