June 28, 2018 / 11:21 PM / 3 months ago

CORRECTED-UPDATE 2-Australia's Atlas Iron backs Rinehart's $287 mln buyout offer

(Corrects bullet 3, paragraph 4 to show Fortescue could block complete takeover, not block deal; changes paragraphs 1, 4 to show deal would give Rinehart ‘greater’ access to key port)

* Atlas agrees to takeover from one of Australia’s richest people

* Another bidder, Mineral Resources, has pulled out

* But billionaire shareholder could still block complete takeover

* Atlas could potentially offer access to key port

By Byron Kaye

SYDNEY, June 29 (Reuters) - Australian iron ore miner Atlas Iron on Friday endorsed a A$390 million ($287 million) buyout from billionaire Gina Rinehart’s Hancock Prospecting, taking the mining heiress closer to gaining greater access to a key port in the west of the country.

A subsidiary of Rinehart’s company launched an unconditional cash bid for the miner last week, trouncing a A$280.2 million scrip offer made in April by Mineral Resources and prompting that company to cancel its bid.

However, world No. 4 iron ore miner Fortescue Metals Group , controlled by another billionaire, Andrew Forrest, has amassed a 20-percent stake in Atlas and earlier this week asked a regulator to halt the Rinehart deal, seeking more information about it.

That could potentially leave Fortescue as a final hurdle between Rinehart’s company and greater access to a port seen as desirable as it lets mining exporters expand their berthing infrastructure as they ramp up production.

The Western Australian state government has previously reserved the port for small miners but the target, Atlas, has said the government appears to be considering relaxing that restriction.

Atlas said in a statement that it recommended the offer from Rinehart’s Hancock, provided an independent expert deemed it “fair and reasonable to Atlas shareholders”, without commenting further on its reasoning.

Spokesmen for Fortescue and Mineral Resources both declined comment.

In a separate statement, Atlas said its information technology systems were affected by a security breach “causing some data disruption”, and that it was working on data recovery.

The statement said the breach did not affect its production activities, but did not say whether the company believed the breach was related to the recent takeover activity.

Under Australian laws which took effect in February, companies must report if data has been compromised.

Atlas said it expected the Hancock offer to open formally early next week and advised shareholders to take no action in the meantime.

Shares of Atlas were flat in early trading on Friday, while shares in Fortescue were down 1.45 percent and Mineral Resources shares had risen 0.2 percent. The broader market was steady.

$1 = 1.3617 Australian dollars Reporting by Byron Kaye in SYDNEY and Chandini Monnappa in BENGALRU; Editing by Richard Pullin and Joseph Radford

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