Red Hawk Offer Price Jumps 14% to $1.20 as Fortescue Gains Majority Control
Fortescue Ltd has increased its takeover offer for Red Hawk Mining to $1.20 per share after securing acceptance from major shareholders, pushing its stake to approximately 78%. This move triggers the offer’s increased price condition and sets the stage for Red Hawk’s likely delisting from the ASX.
- Fortescue’s offer price raised to $1.20 per Red Hawk share
- Major shareholders TIO and OCJ have accepted the offer, giving Fortescue 78% ownership
- Offer condition waiver expected by 17 February 2025, making the offer unconditional
- Red Hawk board unanimously recommends acceptance of the increased offer
- Fortescue plans to delist Red Hawk from the ASX following the takeover
Fortescue Raises the Stakes
Red Hawk Mining Limited (ASX: RHK) has announced a significant development in its ongoing takeover saga. FMG Pilbara Pty Ltd, a subsidiary of Fortescue Ltd (ASX: FMG), has increased its off-market takeover offer to $1.20 per share, up from the initial $1.05. This 14% uplift follows the acceptance of the offer by Red Hawk’s two largest shareholders, TIO (NZ) Limited and OCJ Investment (Australia) Pty Ltd, collectively representing over 81% of the company’s shares.
The increased offer price not only reflects Fortescue’s confidence in Red Hawk’s value but also triggers the offer’s increased price condition, which was contingent on Fortescue acquiring a relevant interest in at least 75% of Red Hawk shares within seven days of the offer opening. With approximately 78% now secured, the higher price applies automatically to all shareholders who have accepted the offer.
Path to Unconditional Offer and Delisting
Fortescue has committed to waiving the sole remaining condition of the offer, acquiring a relevant interest in at least 50.1% of Red Hawk shares, by no later than 17 February 2025. Once this occurs, the offer will become unconditional, triggering payment to accepting shareholders within 10 business days.
Importantly, Fortescue has also signaled its intention to delist Red Hawk from the ASX promptly after crossing the 75% ownership threshold. This move is consistent with Fortescue’s strategy to consolidate its holdings and integrate Red Hawk’s assets more closely within its portfolio.
Board Endorsement and Shareholder Sentiment
The Red Hawk board continues to unanimously recommend acceptance of the increased offer, emphasizing the premium it represents, a 46% uplift over the last traded price before the offer was announced. Directors themselves have declared their intention to accept the offer for all shares they control, reinforcing confidence in the deal’s fairness and strategic merit.
While the board does not anticipate any superior proposals emerging, it advises shareholders to carefully review the independent expert’s report and the detailed rationale supporting acceptance. The offer is set to close on 3 March 2025, barring any extensions or withdrawals.
Market Implications and Next Steps
This takeover development marks a pivotal moment for Red Hawk Mining, signaling a likely transition from a listed entity to a wholly owned Fortescue subsidiary. For investors, the increased offer price and the strong backing from major shareholders provide a compelling exit opportunity. Analysts will be watching closely for any last-minute competing bids or changes in shareholder acceptance rates as the offer deadline approaches.
Bottom Line?
With Fortescue’s increased offer and dominant shareholding, Red Hawk’s ASX chapter appears set to close soon.
Questions in the middle?
- Will any rival bidders emerge to challenge Fortescue’s offer before the closing date?
- How will Fortescue integrate Red Hawk’s assets post-delisting to enhance its mining portfolio?
- What are the implications for minority shareholders who have yet to accept the offer?
