Chinese state iron ore trader Sinosteel Corp won approval from the board of Midwest Corp yesterday after raising its takeover bid for the Australian mine prospector.
Sinosteel's new cash offer was A$6.38 per share, or 14 percent higher than its earlier offer of A$5.60. The revised offer, valuing Midwest at A$1.36 billion (1.3 billion U.S. dollars), could lead to the largest overseas takeover in the metals industry by a Chinese firm.
Midwest, which had asked for an offer of A$7, immediately said the board unanimously recommended that shareholders accept the sweetened offer, turning a hostile offer into a friendly one.
In a statement, Chairman Jesse Taylor said the new offer was "an attractive offer for Midwest shareholders providing the opportunity for certainty and transparent value in the current volatile share market."
Beijing-based Sinosteel already owns 19.9 percent in Midwest, which was suspended from trading in Sydney yesterday and last quoted at A$6.10.
Sinosteel's new offer is conditional on it winning at least 50.1 percent acceptance.
"I am delighted that the board of Midwest recognizes that the Sinosteel offer represents the best value over the long term and is in the best interests of all stakeholders,'' Huang Tianwen, president of Sinosteel, said in a statement.
"We are confident of achieving the 50.1 percent acceptance level and look forward to working with the management of Midwest to drive further development of Midwest's projects."
The offer is currently due to close on May 15, although Sinosteel may extend the offer period in accordance with the Australian Corporations Act.
Sinosteel's proposal for Midwest has already won approval of Australia's Foreign Investment Review Board.
(Shanghai Daily April 30, 2008)
