FMG Pilbara Acquires 66.23% of Red Hawk, Boosts Offer Price to $1.20
Fortescue Ltd’s subsidiary FMG Pilbara Pty Ltd has acquired a 66.23% majority interest in Red Hawk Mining, advancing its takeover bid with an increased offer price to incentivize remaining shareholders.
- FMG Pilbara Pty Ltd holds 66.23% of Red Hawk Mining shares
- Increased offer price of $1.20 per share if FMG reaches 75% ownership by February 4
- Red Hawk’s largest shareholder, TIO (NZ) Limited, accepted the offer, triggering majority control
- Red Hawk Board unanimously recommends shareholders accept the offer
- Offer to become unconditional after FMG acquires over 50.1% interest
Fortescue Advances Takeover Bid
Fortescue Ltd’s subsidiary, FMG Pilbara Pty Ltd, has taken a decisive step in its off-market takeover of Red Hawk Mining Limited (ASX:RHK), securing a majority interest of 66.23% following acceptance by Red Hawk’s largest shareholder, TIO (NZ) Limited. This milestone positions Fortescue firmly in control of Red Hawk’s future direction.
The offer, initially announced on 28 January 2025, proposes a base cash price of $1.05 per Red Hawk share, with an increased offer price of $1.20 per share contingent on FMG acquiring at least 75% of Red Hawk’s shares by 7:00pm AEDT on 4 February 2025. This incentive aims to encourage remaining shareholders to accept the bid promptly.
Board Endorsement and Shareholder Support
The Red Hawk Board has unanimously recommended shareholders accept the offer, emphasizing the absence of any superior proposal and the fairness of the terms as assessed by an Independent Expert. Notably, all Red Hawk directors holding shares have declared their intention to accept the offer, signaling strong internal confidence in the transaction.
FMG has also committed to waiving the sole outstanding condition of the offer within 14 days of acquiring a relevant interest in at least 50.1% of Red Hawk shares, which will render the offer unconditional. Once unconditional, payments to accepting shareholders are expected within 10 business days, providing clarity on the transaction timeline.
Strategic Implications and Market Impact
This acquisition aligns with Fortescue’s broader strategy to consolidate its position in the mining sector, potentially expanding its resource base and operational footprint. For Red Hawk, integration into Fortescue’s portfolio could unlock new capital and operational synergies, although it also raises questions about future management and project priorities.
Investors will be watching closely to see if FMG can secure the remaining shares to reach the 75% threshold and trigger the increased offer price. The closing date for the offer is 7:00pm AEDT on 3 March 2025, unless extended or withdrawn, leaving a window for competing bids or shareholder reconsideration.
Overall, Fortescue’s majority stake acquisition marks a pivotal moment for Red Hawk Mining, signaling a likely shift in ownership and strategic direction in the near term.
Bottom Line?
Fortescue’s majority stake sets the stage for a swift takeover conclusion, but the race for full control remains open.
Questions in the middle?
- Will FMG secure the additional shares to reach the 75% threshold and pay the increased price?
- Could a rival bidder emerge before the offer closes on 3 March 2025?
- How will Fortescue integrate Red Hawk’s assets and management post-takeover?