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Highlights
- Stock Surge: Fortescue shares rose 3% to $19.17 in morning trade following an acquisition update.
- Takeover Milestone: Fortescue secured over 75% of Red Hawk Mining (ASX:RHK), triggering an increased offer price of $1.20 per share.
- Strategic Expansion: The acquisition strengthens Fortescue’s position in Western Australia’s iron ore sector, with a focus on the Blacksmith Iron Ore Project.
Fortescue Ltd (ASX:FMG) shares gained 3% on Wednesday morning, reaching $19.17, as investors responded positively to the company’s successful takeover bid for Red Hawk Mining Ltd (ASX:RHK). The share price movement was also supported by broader market strength.
Last week, Fortescue’s takeover offer for Red Hawk was officially accepted. The bid included a two-tiered pricing structure:
- $1.05 per share initially
- $1.20 per share if Fortescue secured a 75% stake within seven days
Fortescue confirmed that as of 4 February 2025, it has surpassed the 75% threshold, finalizing the acquisition price at $1.20 per share. This means Red Hawk shareholders who previously accepted the offer will receive the increased price.
Major Shareholders Propel Acquisition Forward
The key to Fortescue's success in achieving its target stake was the acceptance of the offer by two major shareholders:
- TIO (NZ) Limited (Todd): Previously held 60.71% of Red Hawk shares.
- OCJ Investment (Australia) Pty Ltd (OCJ): Previously held 21.20% of Red Hawk shares.
With the addition of other shareholders, Fortescue now holds approximately 78% of Red Hawk Mining.
Red Hawk’s board continues to unanimously recommend that remaining shareholders accept the $1.20 per share offer, barring any superior proposal. The independent expert will also confirm whether the deal remains fair and reasonable for shareholders.
Fortescue’s Strategic Interest in Red Hawk
Fortescue’s acquisition of Red Hawk is a strategic move to expand its iron ore production in Western Australia. The key asset of interest is Red Hawk’s Blacksmith Iron Ore Project, an undeveloped site located just 30 kilometers west of Fortescue’s Solomon operations in the Western Hub.
The Blacksmith Project holds a mineral resource estimate of 243 million tonnes at a 59.3% Fe grade, making it a valuable addition to Fortescue’s growing portfolio.
