Fortescue Ltd (ASX: FMG) shares are on the move on Wednesday.
In morning trade, the iron ore giant's shares are up 3% to $19.17.
Why are Fortescue shares rising?
As well as getting a lift from a rising share market, investors have responded positively to an update on a proposed acquisition.
As readers may be aware, last week Fortescue had a takeover offer for Red Hawk Mining Ltd (ASX: RHK) accepted.
Fortescue made an offer which came with two prices. It started at $1.05 per share and then would increase to $1.20 per share if it acquired a relevant interest in 75% or more in Red Hawk shares within seven days.
The good news for Red Hawk shareholders is that Fortescue has now reached its target interest, which means that the offer price is now finalised at $1.20 per share. It said:
Fortescue is pleased to announce that it has, as of 4 February 2025, acquired a relevant interest in over 75 per cent of the fully paid ordinary shares in Red Hawk. Accordingly, as per the terms of the Offer, the offer price will be increased from A$1.05 to A$1.20 per Red Hawk Share (Increased Offer Price). Red Hawk shareholders who have already accepted the Offer will also receive the benefit of the Increased Offer Price.
The key to achieving this was the acceptance of the offer by two major shareholders. In a separate announcement, Red Hawk revealed:
Red Hawk's largest shareholders TIO (NZ) Limited (Todd) and OCJ Investment (Australia) Pty Ltd (OCJ) have now both accepted the Offer. As at 24 January 2025, Todd held 60.71% and OCJ held 21.20% of Red Hawk Shares. With the addition of other Red Hawk shareholders accepting the Offer, this results in FMG now holding a relevant interest in Red Hawk Shares of approximately 78.00%.
Red Hawk once again highlights that its board continues to unanimously recommend that Red Hawk shareholders accept the offer at the increased offer price.
This is in the absence of a superior proposal and subject to the independent expert continuing to conclude that the offer is fair and reasonable, or not fair but reasonable to Red Hawk shareholders.
Why Red Hawk?
It seems that Fortescue is wanting to grow its iron ore production in Western Australia and likes the look of Red Hawk's Blacksmith Iron Ore Project.
It is an undeveloped iron ore project located 30 kilometres west of Fortescue's Solomon operations in the Western Hub. The total Blacksmith mineral resource estimate is 243 million tonnes at 59.3% Fe grade.