Gina Rinehart’s Hancock Corporation has launched an all-cash bid to buy Riversdale Resources as she looks to expand further in the international resources sector.
Mrs Rinehart currently owns 19.8 per cent of Riversdale and has offered $2.20 per share to buy the remaining stock she does not hold.
The offer will increase to $2.50 if Hancock’s ownership levels pass 50 per cent, putting the bid’s total value at around $600 million.
In a statement, Hancock said the $2.50 per offer is a 47 per cent premium to the $1.70 price that Hancock paid to buy its stake in the company in August and September last year.
The bid is not subject to due diligence or a minimum acceptance offer.
Hancock said on Wednesday that Riversdale chairman Michael O’Keeffe, its chief financial officer Anthony Martin and former managing director Steve Mallyon had indicated they would accept the offer. The three men hold about 16.5 per cent of Riversdale shares.
Hancock Prospecting holds a 50 per cent interest in the 46 million tonnes per annum Hope Downs Project, in a joint venture with Rio Tinto, and a 70 per cent interest in the Roy Hill Project, a substantial integrated iron ore mine, railway and port project.
Roy Hill recently ramped up its production and shipments of iron ore to a rate of 55 million tonnes per annum and has obtained approvals to increase production further to 60 million tonnes per annum. Hancock completed the acquisition of Atlas Iron Limited, and also has various iron ore exploration projects in the Pilbara.
Riversdale is a coking coal development which is working on the Grassy Mountain project and surrounding exploration tenements in the Crowsnest Pass region of Alberta, Canada.