Iron ore miner Fortescue Metals has bought a 15 per cent stake in Pilbara miner Atlas Iron and says it will not support a takeover of Atlas by Mineral Resources on its current terms.
Fortescue also has an indirect interest in another 4.9 per cent of Atlas Iron's shares, bringing its total physical and economic interest to 19.9 per cent.
"Fortescue does not intend to support the proposed scheme of arrangement between Atlas Iron and Mineral Resources on its current terms, but reserves the right to do so," Fortescue said in a statement.
In April, Atlas Iron agreed to a $280 million takeover offer from Mineral Resources, under which Mineral Resources agreed to acquire all of the shares of Atlas Iron via a scheme of arrangement.
The offer represents a 59 per cent premium to Atlas's market value on April 4.
The Atlas board has urged shareholders to support the deal, with a vote on the scheme expected in July.
Fortescue said it paid four cents for each Atlas share, which equates to $55.7 million.
Fortescue shares were down one per cent at $4.75 in late trade, Atlas Iron was down 12.5 per cent at 2.8 cents and Mineral Resources was up 0.5 per cent at $18.84.
Mineral Resources, which has a market capitalisation of around $3.5 billion, has said its takeover of the much smaller Atlas will enable both companies to maximise the value of their low-grade iron ore deposits in the face of a tough export market.
Mineral Resources managing director Chris Ellison said in April that the price of low-grade iron ore has dropped as China steelmakers move to using higher grade ore.
Atlas Iron operates mines in the northern Pilbara region of Western Australia, including the Abydos and Mt Webber mines south-east of Port Hedland, and has a number of development and expansion projects, including the Ridley magnetite project.
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