On June 27, Australian miner Atlas Iron Limited (Atlas) and exploration company FerrAus Limited (FerrAus) announced that they signed landmark agreements to consolidate their iron ore assets in the Pilbara region of Western Australia, initially through a combination of the South East Pilbara iron ore assets of Atlas and FerrAus.
As a result of the subscription agreement between Atlas and FerrAus, Atlas will subscribe approximately $24.3 million for 37,439,785 FerrAus shares, and a binding asset purchase agreement pursuant to which Atlas has agreed to sell, and FerrAus has agreed to buy, South East Pilbara iron ore assets owned by Atlas in consideration for 121,846,154 FerrAus shares.
The subscription and iron ore assets acquisition will result in Atlas becoming FerrAus' largest shareholder with a 38.3 percent holding upon completion on a fully diluted basis, and will be subject to FerrAus shareholder approval.
Atlas and FerrAus also signed a bid implementation agreement, pursuant to which Atlas has agreed to offer FerrAus shareholders one Atlas share for every four FerrAus shares, which implies an offer price of $0.858 per FerrAus share.