Fortescue has increased its interest in Red Hawk Mining to 90.09 per cent, cementing the iron ore miner as the company’s majority shareholder.
The upped shareholding marks the beginning of Fortescue undertaking the compulsory acquisition process under the Corporations Act 2001 to takeover Red Hawk Mining.
The acquisition has progressed at a quick pace, having only been announced in late January.
Under the $254 million binding bid implementation deed, Fortescue will acquire all of Red Hawk’s fully paid ordinary shares for cash consideration of $1.20 per share.
The offer price was increased in early February from $1.05 per share to $1.20 per share after Fortescue gained a 75 per cent interest in Red Hawk.
The Red Hawk board continues to unanimously recommend that its shareholders accept the offer at the current price. Red Hawk shareholders who haven’t accepted the offer have until March 3 7pm AEDT to do so, unless the deal is extended or withdrawn.
Red Hawk shareholders who accept the offer before March 3 will receive the consideration for their Red Hawk shares earlier instead of waiting to be acquired under the compulsory acquisition process.
“If Red Hawk shareholders do not accept the offer before the scheduled closing time, on completion of the compulsory acquisition procedure, Fortescue will pay to Red Hawk the consideration for the Red Hawk shares that it compulsorily acquires,” Red Hawk said.
“Those shareholders will then be entitled to claim the consideration from Red Hawk.”
The centre of the acquisition is Red Hawk’s Blacksmith iron ore project, which is located 30km west of Fortescue’s Solomon operations in the Western Hub.
Blacksmith’s total mineral resource estimate currently sits at 243 million tonnes at 59.3 per cent iron grade.
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