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MinRes drops out of race for Atlas Iron

Mineral Resources has dropped out of the race for Atlas Iron, leaving Gina Rinehart’s Hancock Prospecting as the only live offer for the junior miner left on the table.

Atlas yesterday gave the Chris Ellison-led company until Thursday to lift its one-for-571 all-scrip bid for the company, but MinRes did not need it.

The company advised a short time ago it would not be making a counter offer to Hancock’s cash bid of $4.2¢.

WestBusiness reported today that MinRes would have to lift its all-scrip offer by 50 per cent to one-for-385 shares just to match Hancock’s $390 million cash bid.

MinRes’ withdrawal means Atlas’ board is likely to recommend in favour of Hancock’s bid in the absence of a superior proposal.

The focus will now turn to Fortescue Metals Group, which still holds 19.9 per cent of Atlas, and has not yet revealed whether it will launch a rival offer for the junior miner or whether it would sell its holding into Hancock’s bid.

Fortescue would make a small profit if it was to sell into the Hancock bid, having amassed its stake for 4¢.

However the Andrew Forrest-led company could decide to retain its holding, which would be a frustrating factor for Hancock if it was determined to gain full control of the company.

A copy of Hancock’s bidder’s statement containing its offer is expected to be sent to Atlas shareholders and be posted on the ASX platform in two weeks’ time.

Atlas shareholders will have a month to accept unless the offer is extended or withdrawn.

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