FMG closer to securing Red Hawk as offer nears unconditional status
Iron-ore major Fortescue's bid to acquire Red Hawk Mining is progressing towards completion, with the offer now set to become unconditional by February 17.
Fortescue’s subsidiary, FMG Pilbara (FMG), has met the increased offer condition following the acceptance of Red Hawk’s second-largest shareholder, OCJ Investment (OCJ). With the earlier acceptance of TIO (NZ), FMG now holds a relevant interest of approximately 78% in Red Hawk, triggering the increased offer price of A$1.20 a share.
FMG has said it will waive the sole remaining condition by February 17, making the offer fully unconditional. Once this occurs, Red Hawk shareholders who have accepted the bid will receive payment within ten business days. Those who accept after the condition is waived will receive payment within ten business days of their acceptance.
Given FMG’s current level of control, Red Hawk’s board stated that an alternative offer was highly unlikely.
The Red Hawk board recommended shareholders accept FMG’s offer, citing the 14% premium over the base offer price of $1.05 a share and the 46% premium to Red Hawk’s last traded price before the offer was announced. Directors who hold or control Red Hawk shares have also confirmed their intention to accept the offer.
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