Forrest split ‘won’t destroy’ Fortescue, investors say

afr.com:

Big investors in Fortescue Metals said the miner can sail through the breakdown of executive chairman Andrew Forrest’s marriage and the subsequent ownership reshuffle that has given Nicola Forrest control of the single biggest Fortescue stake.

Shares in Fortescue rose by 1.3 per cent on Wednesday as the market traded for the first time sinceAndrew and Nicola Forrest announced their separation in The Australian Financial Review.

The rise in Fortescue shares was weaker than the 3 per cent surge in iron ore prices on Wednesday night and meant Fortescue shares underperformed rival iron ore stocks Mineral Resources and Rio Tinto.

But at Thursday’s closing price of $22.48, Fortescue shares were 53 per cent higher than in October and almost 16 times higher than at the nadir of commodity markets in January 2016, as investors show faith in its ability to pay dividends while pivoting toward clean energy projects.

Transport industry millionaire Peter White has been a top 20 holder of Fortescue shares and said Nicola Forrest would be incentivised to make Fortescue thrive in the same way Andrew Forrest was.

“She is not going to want to destroy it, she won’t be able to get rid of him [Andrew] even if she wanted to,” he said, noting that the Forrests had pledged there would be no change of control nor strategy at Fortescue.

“If she [Nicola] said she was going to unload her stock, all she would do is damage herself. She would lose a lot by doing that, and I don’t believe she is stupid.”

In June, 50 million of the Forrest family’s Fortescue shares were transferred to a company that solely owned by Ms Forrest; Coaxial Ventures Pty Ltd.

Andrew and Nicola Forrest have equal shareholdings in most other Forrest family companies that hold