(Reuters) - Australian iron ore miner Atlas Iron AGO.AX said on Tuesday that it would give Mineral Resources (MIN.AX) three business days to match a buyout offer made from Hancock Prospecting.
Australian billionaire Gina Rinehart’s Hancock Prospecting and mining services group Mineral Resources are waging a bidding battle for Atlas, which operates in the iron ore rich Pilbara region of Western Australia and has undeveloped tenements.
Hancock had offered A$0.042 per Atlas share, or A$390 million ($289 million) on Monday, substantially more than Mineral Resources’ A$280 million offer made in April.
Hancock said last week it had built up a 19.96 percent stake in Atlas.
World No. 4 iron ore miner Fortescue (FMG.AX) has also built up 19.9 percent in Atlas, a stake large enough to block Mineral Resources’ offer.
Shares in Atlas jumped 22 percent to A$0.044 on Monday, slightly above the Hancock bid value, suggesting the market anticipates a potentially higher bid.
Atlas directors said in a statement that they maintained their existing recommendation in favor of the Mineral Resources proposal until the company had had an opportunity to make a counter proposal. It advised shareholders to ‘take no action’.
Reporting by Susan Mathew in Bengaluru, Editing by Rosalba O'Brien