Fortescue acquires Red Hawk Mining

Fortescue and Red Hawk Mining have released the ASX announcement where they announce their transformative agreement. Fortescue, through its subsidiary FMG Pilbara Pty Ltd, has proposed an off-market takeover bid to acquire all fully paid ordinary shares of Red Hawk Mining.

Transation details

The base offer price was A$1.05 per share. An increased Offer Price was A$1.20 per share (if 75% or more of Red Hawk shares are acquired within 7 days). This is 29% above Red Hawk’s 30-day VWAP to 24 January 2025, and 48% above Red Hawk’s 30-day VWAP with the Increased Offer Price.

The overall offer implies a fully diluted equity value of A$254M.

Outside report

The Red Hawk Board has obtained an Independent Expert’s Report from BDO Corporate Finance, which concludes that the Offer is fair and reasonable to shareholders. The Board unanimously recommends accepting the Offer, provided no superior proposal emerges.

This is a win for Red Hawk shareholders, offering immediate value and cash certainty, a premium on market value and mitigation of risks tied to developing greenfield iron ore projects.

Blacksmith Iron Ore Project

Red Hawk owns the Blacksmith Iron Ore Project, with a resource estimate of 243M tonnes at 59.3% Fe grade. Located 30km west of Fortescue’s Solomon operations, this project aligns with Fortescue’s growth strategy.